India Equity Research Reports, IPO and Stock News
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Index of Industrial Production (IIP) grew ~1.8% YoY in December, much lower than our 3.4% estimate due to sharp contraction in capital goods. However, as base effect is soiling YoY data, seasonally adjusted MoM (3MMA) data provides a better sense of the underlying trend. On this basis, industrial activity seems to have recovered in the past two months from the extremely weak Jun-Oct phase. In fact, all sub-categories including the forward-looking intermediate goods posted sequential improvement. In that sense, IIP data corroborates improvement in PMI data and we do expect activity in Q4FY12 to be better than Q3FY12.
However, it may be too early to declare that the business cycle has turned around. The full impact of past monetary actions is yet to play out and fiscal slippages are huge. Besides, we are yet to see discernible improvement in policy environment. Therefore, despite improvement from previous months, industrial activity is likely to remain weak at ~4-5% in coming months.
11 February 2012
IIP - Not as bad as it seems :Edelweiss
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Visit http://indiaer.blogspot.com/ for complete details �� ��
Index of Industrial Production (IIP) grew ~1.8% YoY in December, much lower than our 3.4% estimate due to sharp contraction in capital goods. However, as base effect is soiling YoY data, seasonally adjusted MoM (3MMA) data provides a better sense of the underlying trend. On this basis, industrial activity seems to have recovered in the past two months from the extremely weak Jun-Oct phase. In fact, all sub-categories including the forward-looking intermediate goods posted sequential improvement. In that sense, IIP data corroborates improvement in PMI data and we do expect activity in Q4FY12 to be better than Q3FY12.
However, it may be too early to declare that the business cycle has turned around. The full impact of past monetary actions is yet to play out and fiscal slippages are huge. Besides, we are yet to see discernible improvement in policy environment. Therefore, despite improvement from previous months, industrial activity is likely to remain weak at ~4-5% in coming months.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Index of Industrial Production (IIP) grew ~1.8% YoY in December, much lower than our 3.4% estimate due to sharp contraction in capital goods. However, as base effect is soiling YoY data, seasonally adjusted MoM (3MMA) data provides a better sense of the underlying trend. On this basis, industrial activity seems to have recovered in the past two months from the extremely weak Jun-Oct phase. In fact, all sub-categories including the forward-looking intermediate goods posted sequential improvement. In that sense, IIP data corroborates improvement in PMI data and we do expect activity in Q4FY12 to be better than Q3FY12.
However, it may be too early to declare that the business cycle has turned around. The full impact of past monetary actions is yet to play out and fiscal slippages are huge. Besides, we are yet to see discernible improvement in policy environment. Therefore, despite improvement from previous months, industrial activity is likely to remain weak at ~4-5% in coming months.
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