India Eight Core Industries Index June 2025 (Base 2011‑12=100) – Growth & Trends Analysis

1. Introduction

The Eight Core Industries (ICI)—Coal, Crude Oil, Natural Gas, Refinery Products, Fertilisers, Steel, Cement, and Electricity—constitute approximately 40.27% of India’s Index of Industrial Production (IIP). These sectors serve as key indicators of underlying industrial activity, reflecting both long-term growth trends and cyclical shifts.

Following a volatile pandemic period, these sectors have demonstrated a mixed recovery trajectory. This analysis delves into:

• Long-term trends from 2012–13 to FY 2024–25.
• Impact of the COVID-19 pandemic and subsequent rebound.
• Sectoral performance in FY 2024–25.
• Snapshot of Q1 FY 2025–26 (Apr–Jun 2025).
• Monthly volatility (Jun 2024–Jun 2025).
• Sector-specific drivers, risks, and stock watchlists.

2. Long‑Term Annual Trends (2012‑13 to 2024‑25)

Insights:

• From 2012–13 to 2019–20, the ICI grew annually at 4–5%, driven by infrastructure investments and urbanization.
• FY 2020–21 experienced a contraction (−6.4%) due to pandemic disruptions.
• The subsequent recovery was sharp, with double-digit growth in FY 2021–22, and sustained robust growth through FY 2023–24.
• Growth slowed to 4.5% in FY 2024–25, affected by global input-cost pressures and base effects.

3. Pandemic Impact & Recovery

The pandemic (FY 2020–21) triggered significant setbacks:

• Refinery Products: −11.2%
• Steel: −8.7%

The subsequent rebound (FY 2021–22) was characterized by:

• Surge in oil & gas segments (Natural Gas +19.2%, Steel +16.9%) owing to pent-up demand.
• Continued normalization with growth remaining above pre-pandemic levels until 2023–24.

4. FY 2024–25 Sectoral Performance

Summary:

• Electricity growth (+5.2%) driven by increasing renewables and rural demand.
• Coal decline (-2.2%) reflects environmental restrictions and imports.
• Mixed sectoral outcomes suggest structural shifts and policy impacts.

5. Q1 FY 2025–26 Snapshot (Apr–Jun 2025)

• Steel and cement remain resilient indicators of infrastructure activity.
• Electricity and refinery sectors show signs of softness.

6. Monthly Index & Volatility (Jun 2024–Jun 2025)

Insights:

• Seasonal peaks in March and December reflect infrastructure and construction cycles.
• Notable volatility in coal and electricity due to regulatory and import factors.

7. Sector-Specific Analysis & Company Watchlist

7.1 Steel (17.92%)

• Drivers: Infrastructure stimulus, housing, export demand.
• Risks: Raw material cost inflation (coking coal), global overcapacity.
• Watchlist:
  • Tata Steel (integrated, strong balance sheet)
  • JSW Steel (EAF expansion)
  • SAIL (government support)

7.2 Cement (5.37%)

• Drivers: Rural roads, housing schemes, commercial construction.
• Risks: Fuel cost pressures, financing challenges.
• Watchlist:
  • UltraTech Cement
  • Ambuja Cements
  • ACC

7.3 Refinery Products (28.04%)

• Drivers: Domestic fuel demand, diversification into petrochemicals.
• Risks: Crack spread compression, regulatory levies.
• Watchlist:
  • Reliance Industries
  • Indian Oil Corporation
  • Hindustan Petroleum

7.4 Electricity (19.85%)

• Drivers: Renewables, rural power, discom reforms.
• Risks: Distribution losses, policy gridlock.
• Watchlist:
  • NTPC Ltd
  • Tata Power
  • Adani Green Energy

7.5 Coal (10.33%) & Crude Oil (8.98%)

• Drivers: Power generation, strategic reserves.
• Risks: Environmental restrictions, pricing reliance on imports.
• Watchlist:
  • Coal India
  • ONGC
  • GAIL India

7.6 Natural Gas (6.88%) & Fertilisers (2.63%)

• Drivers: City-gas, agricultural demand.
• Risks: Price controls, subsidy risks.
• Watchlist:
  • Petronet LNG
  • Coromandel International
  • Chambal Fertilisers

8. Strategic Takeaways & Outlook

• Diversify: Mix cyclicals (Steel, Cement) with defensive sectors (Electricity, Fertilisers).
• Input Costs: Keep a close watch on margins, especially in Steel, Cement, and Refinery.
• Policy Changes: Monitor reforms in discom reform, environmental regulations affecting Coal and Power.
• Thematic Opportunities: Focus on renewables (Adani Green), EAF steel (JSW), digital infrastructure (PowerGrid).
• Earnings Cues: Early Q2 results will reveal if Q1 headwinds—especially in Electricity and Refinery—persist.

Disclaimer:

This analysis aims for educational purposes and is not investment advice.