There were at least three positive takeaways of the data. Mining sector has turned positive (0.9%) after two consecutive months of decline. Similarly, intermediate goods too turned up (2.7%) after five consecutive months of decline. Third, consumer durables turned up sharply to 9.3% - a rapid acceleration from the two previous data of 1% in Mar-12 and 5% in Apr-12.
Most other subsectors recorded MoM improvement. Manufacturing went up to 2.5% from near no growth of 0.1% in Apr-12 as did the electricity sector that accelerated to 5.9% (from 4.6% in Apr-12).
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As per the use based classification, basic goods improved to 4.1% (from 2.3% in Apr-12). The decline in capital goods was limited to -7.7% (vs.16.3% a month back) while intermediate goods turned around as mentioned above.
However, the performance of the consumer sector was dragged down by non-performance of the non-durables sector that showed a tepid growth of 0.1%(compared with 5.4% a month back) despite stellar performance from the durables sector as mentioned above.
The data for Feb-12 has been revised up marginally to 4.3% from 4.1% estimated earlier while Apr-12 data has been downgraded to -0.9% from 0.1% as estimated earlier. The data for the month of Jun-12 is expected to be in low single digit again before industrial production turns up, helped in no small measure by a low base.
The weak industrial performance, expected at 3.8% in FY13 is one of the key reason to drag GDP growth closer to 6% level prompting us to place the FY13 estimate at 6.2%.
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