"Consumer sentiments appear weak and slowdown persists but growth does not seem to be falling off a cliff," the broking house said in a note.
On the consumer market, it said the distribution is undergoing a change and 'kiranas' are here to stay and they are getting a strong foothold.
Finance Minister Nirmala Sitharaman a day ago in Chennai said though GDP growth has declined to five per cent in the first quarter, ups and down are part of the growth process and the government is responding to the current economic challenges to revive demand and consumption in the country.
She said the "millennial mindset" of relying on taxi services, besides the upcoming stricter emission norms, are responsible for the auto sector slowdown.
The macro state of economy is such that the muted household spending as reflected in metrics like falling car sales have resulted in unsold inventories. Rising unused capacities in factory plants have shown slackening demand and feeble investment.
Automobile sellers have not been reporting brisk activity, implying lower spending ability and flat income growth. Hundreds of showrooms have shut shop.
Tractor and motorcycle sales - indicators of rural demand - continued to contract.
Commercial vehicle sales slowed even after adjusting for base effects, beaten by low demand.
Construction activity indicators have also slowed down, with contraction in cement production and slower growth in finished steel consumption in June.
( With inputs from IANS )