Japanese brokerage Nomura on Wednesday said the growth rate in festive consumption halved to 15 percent in the current year.
Analysts at the brokerage attributed their findings to "rough estimates" and added that the same growth had stood at 32 percent in 2023 and 88 percent in 2022.
"Anecdotal data suggests retail sales (offline and online) rose during this festive season, but overall growth rates are slower," they said in a note.
It said while festive demand remained steady in rural areas and tier-2 and tier-3 cities, metros and industrial demand was "weak", leading to "mixed" overall festive consumption trends.
Last month, the Union Ministry of Finance had said urban demand was weak.
The Nomura analysts said weddings in December should provide a fillip to the festive sales.
"There are broadly two ways to assess the strength of festive demand. One is to sift through anecdotal evidence and compare trends with previous years. Another, in the case of 'hard' conventional data, is to aggregate economic activity across the September-December period and compare across years, which helps to iron out the 'date effect' on growth rates," it explained.
Under anecdotal evidence, it cited The Confederation of All India Traders (CAIT) expectations on retail sales growth slowing down to 13.3 percent in 2024 from 36.4 percent in the year before, growth in ecommerce sales and gold volumes falling even though sales have picked up.
On the 'hard' data front, the brokerage said incoming inputs are suggesting stability but there are fireworks.
It said retail auto sales are up 14 percent adjusted for the period of shradh, but on the wholesale side, passenger vehicles and MHCV have fared poorly in 2024.
A "cyclical growth slowdown" is underway in the economy, it said, adding that the Reserve Bank of India's 7.2 percent real GDP growth estimate for FY25 looks "overly optimistic" and there are "rising downside risks" to its own projections of 6.7 percent growth.
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