India Q4 GDP today: Can a sub-7% growth disappoint the Indian stock market? Here’s what experts say

India Q4 GDP today: India's gross domestic product (GDP) growth figures for the March quarter of the last financial year (Q4FY24) and the entire financial year will be released on Friday, May 31. Although Q4 GDP growth is expected to moderate compared to the third quarter, it is unlikely to impact market sentiment significantly, as attention is primarily focused on the outcome of the 2024 Lok Sabha elections.

Many experts believe India's GDP in Q4FY24 grew at an annual pace of below 7 per cent compared to 8.4 per cent during the October-December quarter of FY24 (Q3FY24). For the entire year, the GDP number could come near 8 per cent.

"The Q4 GDP number is insignificant for the market and will not have any material impact on market sentiment. The market's focus now is on the Lok Sabha election result. Investors may take note of the GDP growth number for the entire financial year 2024 which can come around 8 per cent," V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, told Mint.

Also Read: India’s GDP likely grew below 7% in Q4FY24; 5 experts share their views on Indian growth outlook

G. Chokkalingam, founder and head of research at Equinomics Research Private Ltd., also said the Q4 GDP number is a non-event for the stock market as the focus is on the election outcome.

"The Q4 GDP number will be lower than the Q3 but will not impact the mood of the market as the election result is the most important factor at the moment. After the election results, investors will focus on the upcoming Budget and the Q1FY25 growth prints," said Chokkalingam.

Sunil Damania, Chief Investment Officer, MojoPMS, pointed out that the market focuses on the election results. Although GDP data is set to be released on Friday evening, the Saturday exit polls are anticipated to be the most impactful event. 

“The market is expected to react more significantly to exit poll results than GDP growth figures. India Inc.'s earnings growth in the March quarter highlights a slowdown in the economy. Based on current commentary, it appears likely that we will witness muted GDP growth in the first and second quarters of FY25,” said Damania.

GDP growth likely moderated in Q4FY24

According to a Mint poll of economists, India's Q4 GDP growth slowed to 7 per cent due to a slowdown in industrial growth and subdued agricultural activities.

However, strong growth in all quarters would result in GDP growth rising to 7.9 per cent in FY24 from 7 per cent the previous year, according to estimates by 19 economists.

Also Read: GDP grew 7.9% in FY24 despite slower January-March: Mint poll

Economists at SBI Research expect India's FY24 GDP growth to touch 8 per cent, while the Q4 GDP print may show an annual rise of 7.4 per cent.

Sanjeev Agrawal, President, PHD Chamber of Commerce and Industry, expects Q4 real GDP to hover around 7 per cent, making an overall growth for the financial year 2023-24 at around 7.9 per cent.

Agrawal said that going forward, real GDP in FY25 is expected to hover around 8.1 per cent due to the government's continued reforms.

"The high growth trajectory of the Indian economy is expected to support the market momentum to the new highs; however, volatility can’t be ruled out vis-a-vis the ongoing electoral process in the country. The market momentum indicators such as high growth of GDP, forecast for the positive monsoon behaviour, softening inflation and fiscal direction are moving in tandem and supporting India’s lucrativeness to the global investors," said Agrawal.

Also Read: Indian economy needs to navigate challenges from AI, climate shocks: RBI annual report

According to Amit Goel, co-founder and chief global strategist at Pace 360, the tight monetary policy probably weighed on India's GDP expansion, and a jump in net taxes that pushed up growth in Q4CY23 is unlikely to have been repeated.

Goel sees a risk that high rates for longer could delay a structural upswing in growth that favourable demographics, improved infrastructure, and political stability would otherwise unleash.

"We expect faster expansions in agriculture and services to make up for a sharp slowdown in manufacturing growth. We think the Reserve Bank of India will likely delay the start of rate cuts until Q3 as soon as possible. As a result, growth is unlikely to realise a sustained pickup until Q1CY25," said Goel.

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