Industrial Output Quickens to 1.5% in June 2025

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28 Jul, 2025

Industrial Output Quickens to 1.5% in June 2025

India’s industrial output rose 1.5% yearonyear in June 2025, improving from a revised 1.2% in May, according to official figures from the Ministry of Statistics and Programme Implementation (MoSPI). While modest, this acceleration signals a tentative return of momentum in industrial activity.

Sector highlights:

Manufacturing – the heaviest weight within the IIP – grew by 3.9% in June, up from 3.2% in May.

Mining contracted sharply by 8.7%, worse than May’s marginal fall of 0.1%.

Electricity generation fell by 2.6%, an improvement from May’s 4.7% drop.

Consumer durables rebounded (+2.9%), reversing a decline in the previous month, while non-durables still fell (0.4%).

Meanwhile, the overall infrastructure (core) sector—which forms around 40% of industrial output—grew at 1.7% yearonyear in June, the fastest pace in three months, up from a revised 1.2% in May.

Supported by a resilient PMI reading (58.4 in June, a 14month high) and rising export orders, manufacturers showed robust output and hiring momentum.

Despite the uptick, the broader picture remains cautious. The April–June (Q1 FY26) industrial output growth came in at about 2%, significantly lower than last year’s 5.4% during the same quarter.

How This May Impact the Indian Stock Market

1. Sectoral Stocks

Manufacturing plays: Auto, capital goods, consumer durables, and engineering firms could see positive investor sentiment as durable goods and export orders rise.

Infrarelated stocks: Cement, steel, and refinery companies may benefit from infrastructure-sector rebound (cement +9.2%, steel +9.3%, refinery +3.4%).

Weakness areas: Mining and utilities stocks may underperform, given sharp contraction in mining (8.7%) and electricity output (2.6%).

2. Macro & Policy Sentiment

Sluggish industrial growth could temper expectations of aggressive interest rate cuts from the RBI. However, stable inflation and rising PMI may keep the door open for moderate easing if momentum continues.

Government capital expenditure trends could support infrastructure firms and cyclical investments, but private capex remains muted.

3. Market Indices & Outlook

Broader indices like the Nifty or Sensex may respond positively to manufacturing and export-oriented strength, especially if sentiment around Q2 FY26 improves.

Market volatility may persist if sectors lag or global growth slows, but the modest recovery in industrial activity provides a constructive near-term tone.

Summary

India’s industrial output grew at 1.5% yearonyear in June 2025, marking a modest recovery from May’s low of 1.2%, led by manufacturing and core infrastructure sectors. Mixed signals persist—with mining and electricity lagging, while PMI data, durable goods, exports, and infrastructure segments offer optimism. For the stock market, manufacturing and infrastructure names may benefit, while utilities and mining face pressure. Overall, the data lends cautious support to continued economic rebuilding, though growth challenges remain.

By Nehal Taparia

This content is for educational and knowledge purposes only and should not be considered as investment or Trading advice. Please consult a certified financial advisor before making any investment or Trading decisions.

Our Recent FAQS

Frequently Asked Question &
Answers Here

Q1: What exactly is India’s industrial output index (IIP)?

The IIP measures output across three sectors—manufacturing, mining, and electricity—and tracks the volume changes in industrial production. It’s a key indicator of economic momentum

Q2: Why is 1.5% growth in June important?

Though low by historical standards, the uptick from 1.2% to 1.5% suggests easing pressure after a nine-month slowdown, particularly in manufacturing and core infrastructure sectors.

Q3: Which sectors are driving the recovery?

Manufacturing is leading the rebound, while cement, steel, and refinery products in the core sector grew strongly (~9%). In contrast, mining and electricity outputs remain weak.

Q4: What does the PMI reading indicate?

The PMI (Purchasing Managers’ Index) rose to 58.4 in June—indicating strong expansion in both domestic and export demand, new orders, and hiring acceleration .

Q5: Is this turnaround sustainable?

Not yet clear. While industrial and core sectors show signs of strength, mining and electricity continued contraction. Overall quarterly growth is moderate, and global headwinds and weak private investment remain risks.