ICRA Insight

July 2025

Foreword

We're pleased to introduce the July 2025 edition of ICRA Insights in a refreshed and redesigned format. This new look is part of our ongoing effort to enhance readability while continuing to deliver research-backed perspectives on India's evolving economic and sectoral landscape.

In this edition, our Chief Economist, Aditi Nayar, shares her outlook on Q1 FY2026, noting signs of a slowdown in economic activity amid mixed industrial and services sector trends.

Our Research Recap section features in-depth analyses across key sectors. We examine the Indian Cement sector, where demand is expected to grow 6–7% in FY2026, supported by stable input costs and price hikes. The Renewable Energy sector continues to gain traction in the commercial and industrial segments. We also explore trends in Affordable Housing Finance, highlighting regional shifts in AUM and rising ticket sizes.

This edition also includes updates on our CSR initiatives, media coverage, rating updates, rating methodologies, and a podcast featuring insights from the Moody's-ICRA Conference.

We hope you enjoy the refreshed design and continue to find value in the insights we share.

K. Ravichandran

Chief Ratings Officer, ICRA Limited.

Aditi Nayar

Chief Economist, ICRA Limited.

Monthly Macro Wrap

The growth in economic activity likely cooled in Q1 FY2026, given the deterioration across industrial segments in the first two months of the quarter, and mixed trends in services-related indicators, suggesting that services GVA growth is unlikely to accelerate meaningfully vis-à-vis Q4 FY2025. While agricultural growth is likely to remain healthy, we are apprehensive that GDP growth may decelerate to sub-6.5% in Q1 FY2026.

Listen to the podcast

Spotlight
on CSR

Celebrating Community and Connection

ICRA began its 2025 community initiatives with a Volunteering Programme at Jai Vakeel Foundation, Mumbai, on June 20th. Honouring International Yoga Day, our leadership team engaged with students, celebrating inclusion, empathy, and connection—setting a positive tone for future impactful efforts. Click here to know more!

Research Recap

Indian Cement Sector

Cement demand is set to rise 6–7% YoY in FY2026, reaching 480–485 million MT. Operating margins may improve to 16.3–17.0% due to stable input costs and price hikes.

Indian Renewable Energy Sector

Renewable energy demand in the commercial & industrial segment remains strong, driven by cost savings, sustainability goals, and policy support. Achieving 20% RE penetration by 2030 will require almost 100 GW capacity.

Affordable Housing Finance Companies

Category-2 states are gaining AUM share due to branch expansion and strong macro factors, while Category-1 states remain dominant. Asset quality is strong and rising real estate prices are driving ticket size growth.