New Delhi, July 22 -- India's economic activity accelerated sharply in June, with Icra's Business Activity Monitor (BAM) hitting a 32-month high on broad-based gains across high-frequency indicators. However, the rating agency expects GDP growth to moderate to 6.4-6.6% in the first quarter of FY27, as higher energy and commodity prices weigh on corporate margins.

Icra's composite index of high-frequency indicators grew 12% year-on-year in June, up from 9.4% in May and the strongest expansion in nearly three years. The improvement was broad-based, with 13 of the 16 constituent indicators registering faster growth during the month.

The ratings agency attributed the stronger momentum to multiple factors, including the temporary ceasefire b...