Renewed focus on India infrastructure to reflect in GDP numbers

Investment-related sectors also most likely rebounded.

India's GDP growth for the Apr-Jun quarter is due later this week, with early signs of a rebound in investment-related sectors and renewed focus on infrastructure likely in the numbers.

According to a reserch note from DBS, its estimate at 4.9% YoY is on the conservative end of the market expectations, with upside surprise, if any, likely to spring from the aforementioned sectors.

The Reserve Bank of India (RBI) industrial outlook survey bottomed out, with the overall business situation and order books expectations improving notably for the Sep quarter.

In addition to sentiments, real activity has also picked up through a rebound in industrial production and core industries output.

Here's more from DBS:

Manufacturing activity rose 3.1% YoY in Apr-Jun14, reversing from the -1.0% drop in the comparable period last year. Electricity generation was also up an impressive 11.4%.

However, there are concerns that this sector and broader power generation might slow after the Supreme Court ruled earlier this week that coal mines allocated between 1999-2010 were illegal.

Implications for the sector will be clearer once the final ruling is issued in early-Sep.

In the longer-run, this decision will encourage a move towards a more transparent allocation process, though in the short-term any ruling to close these mines is likely to aggravate supply shortages.

This will be an additional constraint to already strapped domestic coal supply situation and necessitate further imports, a negative for the external balance.

Annual coal imports had averaged USD 16.7bn in the past three years, nearly double from USD 9.7bn in FY10/11.