·         Large Scale Manufacturing Industries (LSMI) sustained its positive momentum in Nov’25, demonstrating robust growth of 10.37%YoY while maintaining steady progress of 0.16%MoM. The provisional Quantum Index of Manufacturing (QIM) for Nov’25 reached 118.28, marking continued industrial recovery and expansion. More significantly, the cumulative performance for 5MFY26 shows sustained growth of 6.01%, with the QIM standing at 115.72, up from 109.65 during the same period last year. Mainly due to broad-based expansion and strengthening industrial fundamentals across multiple key sectors.

·         On a monthly basis, the marginal increase of 0.16% reflects stable production momentum, with notable improvements in several sectors. Furniture manufacturing showed remarkable sequential growth at 55.56%, followed by beverages at 32.61%, and petroleum products at 12.36%. However, some sectors experienced contraction, wearing apparel (-11.96%), indicating potential demand fluctuations or seasonal adjustments in these categories.

·         The impressive 10.37%YoY expansion highlights significant industrial recovery compared to last year’s levels. This growth was primarily driven by exceptional performances in key sectors, with automobiles surging by 61.35%, petroleum products by 43.66%, and garments by 18.43%. Cement production also contributed positively with 8.74% growth, reflecting ongoing infrastructure development and construction activity.

·         The 6.01% cumulative growth represents sustained industrial expansion during 5MFY26, with 14 out of 22 manufacturing sectors showing positive movement. The automotive sector emerged as the largest contributor to overall growth, adding 1.77% to the total expansion, followed by petroleum products (+1.29%), garments (+1.24%), and cement (+0.78%).

·         The exceptional performance in Automobiles (61.35% YoY) is strongly tied to the lower interest rate environment (policy rate reduced to 10.5%), which has improved credit affordability for both consumers and businesses. Meanwhile, strict border surveillance to curb fuel smuggling has redirected demand into the formal economy, significantly boosting domestic Petroleum Products (43.66% YoY). On the trade front, reduced import tariffs from the USA may have enhanced export competitiveness for value-added sectors like Garments (18.43% YoY). Furthermore, higher export volumes of Cement (8.74% YoY) and Food items (0.70% YoY) have likely been stimulated by improved access to regional markets, supported by favorable trade terms, thereby driving domestic production. Conversely, sectors like Iron & Steel (-5.99% YoY) and Machinery (-16.37% YoY) may be lagging due to structural inefficiencies, import competition, or slower-than-expected uptake in industrial investment despite lower borrowing costs

Courtesy – AHCML Research