Manufacturing demand outlook improves as cost pressure persists
The RBI’s Industrial Outlook Survey showed India’s manufacturing demand outlook improving for Q3FY27, with the Business Assessment Index rising to 104.4. Raw-material cost pressures remained elevated, while OI Charts data showed mixed derivatives positioning in Larsen & Toubro and Tata Steel.
pre-market1 source ↓machine-written, see hownot a recommendation
- LT close
- ₹3,703
- On the day
- +2.16%
- Futures OI, short covering
- -1.3%
- Put-call ratio
- 0.87
- Max pain
- ₹3,800
India’s manufacturing sector entered Q3FY27 with a stronger demand outlook, but elevated raw-material costs continued to pressure the operating environment, according to the Reserve Bank of India’s Industrial Outlook Survey. The survey, reported on 11 Oct 2026, showed that conditions improved in Q2FY27 as production, order books and capacity utilisation strengthened. The Business Assessment Index rose to 104.4 in Q2FY27 from 100.4 in Q1FY27, signalling broader improvement in business conditions.
The survey also highlighted a margin challenge for manufacturers ⚙️. Raw-material cost pressures remained elevated, while sentiment on selling prices moderated, indicating that companies may face limits in passing higher input costs to customers. For the sector, the combination of firmer demand and weaker pricing sentiment leaves earnings sensitive to commodity costs, capacity utilisation and order conversion. The outlook is therefore positive on volumes but mixed on margins.
OI Charts data from 9 Oct 2026 showed contrasting positioning in two manufacturing-linked names. Larsen & Toubro closed at ₹3,703, up 2.2% on the day, while its futures open interest fell 1.3%, indicating short covering. The stock remained down 5.6% over 20 sessions, and its ₹4,000 call and put strikes had the largest open interest for the 27 Oct expiry. Max pain stood at ₹3,800, giving traders a defined near-term reference range.
Tata Steel closed at ₹173.80, up 1.1%, with futures open interest rising 0.1% in a long build-up. However, the stock was down 7.9% over 20 sessions. Its largest call open interest was at ₹200, while the largest put open interest was at ₹190; max pain was ₹182.50 for the same expiry. The put-call ratio was 0.57, reflecting relatively greater call-side positioning.
What to watch next is whether Q3FY27 order growth converts into higher production and capacity utilisation without a renewed rise in input costs. For listed manufacturers, upcoming company updates, commodity prices and the 27 Oct derivatives expiry will help determine whether the improved demand outlook translates into sustained earnings momentum
Source: ANI News, 11 Oct 2026
Not investment advice. For informational purposes only.