From autos to consumption and defence, nine themes to watch this festive season

The Navratri economy is gaining momentum with strong festive tailwinds. Sectors ranging from auto components and FMCG to defence and clean energy are expected to shape the festive market outlook, according to a latest report by Smallcase, an investment platform.

“Investment managers on smallcase highlight that from auto and consumption to renewables and defence, Navratri 2025 offers investors a timely opportunity to align portfolios with India’s strongest growth stories,” the report notes.

It highlights that e-commerce sales this festive season are projected at ₹1.2 lakh crore, up 27% YoY, while UPI transactions surpassed 20 billion in August. Micro, small, and medium enterprises (MSME) festive credit demand is expected to rise 35–40% to ₹3.45 lakh crore.

Against this backdrop, investment managers on smallcase have highlighted nine sectors poised to benefit from festive demand, policy reforms, and structural growth trends.

Auto components

Wright Research notes a festive rebound in auto demand, with retail sales in August growing 2.84% YoY and wholesale dispatches reaching 3.22 lakh PVs and 18.34 lakh two-wheelers. Policy support through GST 2.0 and the ₹25,938 crore PLI-auto/components programme, combined with elevated rural liquidity, is expected to boost both OEM and aftermarket demand in brakes, tyres, batteries, and electronics.

FMCG & consumption

Investment managers highlight a multi-year consumption revival, with Q2CY25 FMCG value growth at 13.9% YoY. Rural consumption is forecasted to hit a 14.6% CAGR, with staples, beauty, and discretionary categories seeing a strong festive uplift. GST-led tax cuts, rising household incomes, and e-commerce expansion, including quick commerce, adding ₹14,000 crore, are strengthening the structural growth story.

Gold

Gold demand is expected to surge during Navratri–Diwali, driven by cultural tradition and global macro trends. The rising gold allocations by central banks around the world, coupled with RBI's increasing reserves, align with rising household incomes and festive buying sentiment.

NBFCs

GoalFi reports that MSME and auto loan demand are poised for strong seasonal growth, with overall credit expansion expected at 13–15% in FY26. Smaller towns, contributing 70% of festive loan demand, remain key drivers of growth for NBFCs.

Pharmaceuticals and healthcare

The sector is projected to hit a 12–14% CAGR over FY25–28, with Navratri coinciding with higher health and wellness spending. The domestic formulations market is expected to reach $65 billion by FY26, while hospitals, diagnostics, telemedicine, and e-pharmacies continue to expand rapidly.

Renewable energy

Solar and EV adoption are on the rise, with solar capacity growth at 31% YoY in 2025 and EV penetration in two-wheelers expected to reach 25% by FY30. Battery storage systems and transmission infrastructure are scaling rapidly, aligning festive mobility sentiment with structural opportunities in clean energy.

Capital markets

India’s retail participation has hit record highs with 155 million demat accounts, while mutual fund SIP flows average ₹21,000–22,000 crore per month. Rising financialisation of household savings positions capital markets for continued growth and wealth creation.

Infrastructure and construction equipment

The government-led capex, including a central allocation of ₹11.21 lakh crore for FY26, and GST cuts on cement are driving demand for construction equipment and higher utilisation for contractors. CE volumes are forecast to grow 2–5% in FY26, benefiting from private capex recovery.

Defence

Defence production hit ₹1.50 lakh crore in FY25, with exports reaching ₹23,622 crore. The Atmanirbhar Bharat initiative and rising global demand position the sector for premium valuations and high growth, with the ministry of defence targeting ₹50,000 crore in exports by 2029.

Outlook

Investment managers said that Navratri 2025 presents a timely opportunity for investors to align portfolios with India’s structural growth themes. The convergence of festive sentiment, policy support, and strong economic indicators is expected to act as a catalyst for market momentum across these high-conviction sectors.

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