"High-frequency indicators continue to show familiar pain points – a deep contraction in consumption, weak investment, a slowing external sector, and an under-performing services sector," Nomura said in a research note.
The report added that some indicators are showing early signs of bottoming out. Data so far for July show that 53 percent of indicators have improved compared with 31 percent in June, the report noted.
Nomura's Composite Leading Index (CLI) for Q3 (July-September) has ticked marginally higher to 99.9 from 99.8 in Q2, led by higher industrial production growth, an improvement in visitor arrivals growth, equity markets and lower policy rates.
"While the concurrent state of the economy remains quite concerning, nascent signs of green shoots and positive performance of leading indicators provide some signs that a recovery may be slowly materializing," the Nomura report said.
India's economic growth slowed to 6.8 per cent in 2018-19 - the slowest pace since 2014-15. There are ominous signs showing that slowdown may be deep.
Consumer confidence is waning, foreign direct investment has plateaued and international trade and currency war is further aggravating the problem.
To take stock of the situation, Finance Minister Nirmala Sitharaman held several meetings with officials and industry leaders who have asked for stimulus measure to boost consumer demand and private investments.
Though there are increasing signs of the government taking stock of the slowdown, and possibly announcing some short-term measures to buoy business confidence, Nomura assesses limited fiscal space for any substantive stimulus.
"We currently expect GDP growth in Q2 to slow to 5.7 per cent YoY from 5.8 per cent in Q1, before improving to 6.4 per cent YoY in Q3 and 6.7 per cent in Q4," it said, adding that it was closely watching for signs of sustainability of the growth turnaround.
The Central Statistics Office (CSO) will come out with the GDP figures for the first quarter (April-June) on August 30.
Meanwhile, the automobile sector is facing its worst crisis in two decades and reports suggest thousands of job losses in the auto and ancillary industry.
In the real estate sector, the number of unsold homes has increased, while fast-moving consumer goods companies have reported a decline in volume growth in the first quarter.