FEBRUARY IIP: CAME AT 4.1% :: Kotak Securities PDF link

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http://www.kotaksecurities.com/pdf/dmb/MorningInsight13042012.pdf

FEBRUARY IIP: CAME AT 4.1%
High volatility in IIP and components makes it extremely difficult to rely on
the series for policy analysis and makes it difficult to predict its future
trend. Industrial production in February surprised on the downside  with
4.1% growth, though bigger surprise came from sharp downward revision
of January IIP to 1.1% from 6.8%, on account of downward revision in
Consumer non-durables growth from 16.9% to 11%.
Cumulative growth during Apr-Feb FY12 has slowed to 3.5% vs. 8.1% last
year, while the advance GDP estimates indicate the industrial sector growth
for the entire FY12 at 3.9%. To achieve estimated GDP growth of FY12, IIP
growth in Mar should come at 7.7% (YoY) and 19% (MoM), which is
unlikely in our opinion.
3MMA of IIP fell sharply to 2.6% vs. 7.5% 3MMA in February 2011. Improved performance in Electricity (wt. 10.32%) at 8.05% (from 3.2% in Jan) saved the day despite slower growth in manufacturing sector at 3.95% (wt. 75.53%), and reversal in
mining sector with 2.1% (wt. 14.16%) growth.