Dec-25 core sector grows 3.72%, with strong traction in 2 months

30 Jan 2026 , 01:21 PM

CORE SECTOR GROWTH – BIG STORY IN A NUTSHELL

Core sector (Infrastructure) growth for December 2025 came in at 3.72%. The reason this growth is special is that just 2 months back in October 2025, the core sector output had contracted by -0.06%. The November output had been reported at 1.76% a month ago, but has now been upgraded to 2.07%. On top of that the December 2025 core sector growth has come in at 3.72%, which shows a sharp turnaround in infrastructure output.

Why does this number matter to an investor? There are 3 reasons, why you must pay attention to the core sector growth. Firstly, strong core sector growth means that the government is investing in capex, which is a positive signal. Secondly, core sector is around 40% of the Index of Industrial Production (IIP), so both IIP and GDP should benefit. Lastly, a turnaround in core sector growth is normally positive for infrastructure stocks in the stock market. By infrastructure we mean stocks in capital goods, construction, etc.

A quick word on what is core sector, so you are able to appreciate its importance better. It is a basket of 8 infrastructure sectors; Coal Mining, Oil Extraction, Oil Refinery Products, Natural Gas, Fertilizers, Steel, Cement, and Electricity. The list is self-explicit. While core sector is overtly tilted towards fossil fuels, these 8 sectors surely represent the building blocks of the Indian economy. That is why you must closely look at core sector trends.

TRENDS IN CORE SECTOR GROWTH – LAST ONE YEAR

The table captures breakdown of the 3.72% yoy core sector growth for December 2025 across 8 infrastructure baskets. Previous data points have been revised, appropriately.

Months	Overall (%)	Coal (%)	Crude (%)	Natural Gas (%)	Refinery (%)	Fertilizers (%)	Steel (%)	Cement (%)	Electricity (%)
Dec-24	5.09	5.29	0.65	-1.76	2.83	1.67	7.31	10.32	6.17
Jan-25	5.08	4.64	-1.14	-1.51	8.31	2.96	4.73	14.31	2.28
Feb-25	3.36	1.65	-5.17	-6.04	0.75	10.24	6.85	10.71	3.63
Mar-25	4.51	1.64	-1.90	-12.74	0.20	8.83	8.69	12.22	7.49
Apr-25	0.99	3.46	-2.75	-0.94	-4.50	-4.16	4.38	6.34	1.75
May-25	1.19	2.76	-1.80	-3.56	1.06	-5.89	7.44	9.65	-4.71
Jun-25	2.20	-6.81	-1.21	-2.77	3.36	-1.19	9.71	8.16	-1.21
Jul-25	3.75	-12.27	-1.31	-3.21	-1.12	2.02	16.58	11.57	3.72
Aug-25	6.53	11.36	2.38	-2.20	2.99	4.58	13.55	5.36	4.15
Sep-25	3.28	-1.19	-1.25	-3.83	-3.65	1.63	14.36	4.98	3.09
Oct-25	-0.06	-8.55	-1.21	-5.04	4.58	7.38	5.92	5.18	-6.93
Nov-25	2.07	2.10	-3.25	-2.51	-0.94	5.58	6.72	14.58	-1.52
Dec-25	3.72	3.58	-5.65	-4.35	-1.01	4.08	6.85	13.46	5.34

Data Source: DPIIT (Department for Promotion of Industry and Internal Trade)

In December 2025, 5 out of 8 core sectors saw positive growth and 3 saw negative growth. In the core sector basket, refinery products has highest weightage of 28.04%, followed by electricity at 19.85% and steel 17.92%. Of these 3 sectors, refining contracted by -1.01%, Steel grew +6.85%, and electricity grew +5.34% in December 2025.

FIVE KEY TAKEAWAYS FOR INVESTORS FROM THE DEC-25 CORE SECTOR NUMBERS

What are some of the signals we picked up from the core sector data?

• The lower oil output and lower oil refining throughput is in tune with lower demand and also to put lower pressure on the Russia import story. Hopefully, things should normalize once the Indo-US trade treaty is done and dusted.
• The big positive this month is the affirmative rebound in electricity output after 2 months of negative growth. This is matched by a pick-up in coal output, but much of the additional output has come from renewable energy. Power demand has been subdued.
• Clearly, construction and infrastructure appear to be the big themes for the past few months as evidenced by the sharp surge in output of steel and cement. Both these sectors have been consistently leading the India core sector story.
• Fertilizers output has improved in the last 3 months significantly. Now, fertilizers may be small in the core sector weightage, but this has significant implications for the fertilizer subsidy bill, which largely arises from import of urea products.
• In the year ago period, the core sector output fell from 5.78% to 5.09%, so there is some base effect impact on this core sector output growth. However, if you look at a 2-month story, then current core sector is up despite higher base; which is a positive signal.

Let us finally look at what are the sectors that investors should look at with the core sector output for December 2025 being published.

CORE SECTOR OUTPUT – SOME INVESTMENT SIGNALS

What should investors read from the December 2025 core sector data? Here are some quick investment takeaways.

• The sharp pick-up in steel and cement output are indicative of the fact that the downstream construction and infrastructure segment is seeing overflowing order books. That is normally a big positive for infrastructure stocks.
• Investors must take a close look at the Fertilizer stocks because they play a major role in reducing the import subsidy bill. Investors can look forward to positive triggers from the Union Budget on 01-Feb. That is a sector to keep an eye on.
• In the power sector, the investment argument is clearly shifting from traditional thermal power predominance to renewable energy predominance. Investors in power stocks must position their holdings accordingly.

Overall, it is a positive core sector story in December 2025. More importantly, investors have a lot of positive takeaways from the core sector numbers.

 

LLM Summary The core sector output has shown a clear positive signal in the last 2 months, largely arising from revival in domestic output, better demand expectations, and supported by government capex during this period. That is surely adding up positively for core sector. For equity investors, there is a clear message from the core sector data. It signals positive growth traction for capital goods, construction, and infrastructure stocks. Also, the core sector is throwing up some interesting ideas ahead of the Union Budget.