JEI#43: Jun‘26 - Positive side of low rains

Research evidence excerpt

JEI#43: Jun‘26 - Positive side of low rains

India | Equity Strategy EquityJulyResearch21, 2026

STRATEGY NOTEJEI#43: Jun'26 - Positive side of low rains

Economic activity improved in Jun'26 supported by continued strength

in power demand, construction activity, auto sales and credit growth Exhibit 1 - Jefferies Economic Indicator (JEI) %

alongside improvement in select domestic consumption linked indicators. YoY12 (% YoY)

10This augurs well for June qtr results. However, with monsoon rainfall still

running materially below normal (-23% as of today) and kharif sowing 86

lagging last year, the rural and inflation outlook remains a key watchpoint. 42

Jun-24 Jul-24 Aug-24 Sep-24 Oct-24 Nov-24 Dec-24 Jan-25 Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25 Sep-25 Oct-25 Nov-25 Dec-25 Jan-26 Feb-26 Mar-26 Apr-26 May-26 Jun-26

JEI improves in Jun. Our economy tracker indicator - JEI (based on 35 indicators' monthly Jefferies Economic Indicator (% YoY)

data) - shows growth in Jun was +1.1ppt MoM to 6.5% YoY, a 6-mth high. The economic activity .Source: Jefferies3 per. Mov. Avg. (Jefferies Economic Indicator (% YoY))

remained resilient during the Middle East conflict and improved in June with a 40% below

normal rainfall reducing the usual drag in activity during the month. Exhibit 2 - Credit and deposit growth trend for

banks

18.6%Broad-based indicators strengthen. Electricity demand was key positive, staying strong at 20%18%16% (YoY)

11% YoY in Jun'26, a 2-yr high, with demand at +12% yoy in Jul also so far. Fuel demand also 14%12% 13.3%

improved with petrol / diesel consumption up 4ppt/5ppt to 7%/6% YoY, recovering as Middle 10%8%6% Credit growth has

East conflict cooled-off. Port traffic growth stayed stable MoM at 4% yoy. Within movement 4%2% picked up