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IIP for July 2011 came in at 3.3% yoy, significantly below market expectations. The underperformance was on account
of contraction in capital goods (down 15.2% yoy) and intermediate goods (down 1.1% yoy). Manufacturing growth was
also muted at 2.3% yoy as against 10.3% yoy in the previous month, with 15 of its 22 industry groups registering
positive growth. While investment momentum was weak during the month, consumption growth surprised positively at
6.3% yoy with durables growth coming in strong at 8.6% yoy. With three month moving average of IIP falling to 6% yoy
(lowest in 19 months), concerns on the extent of growth moderation would be back to the fore. However, we believe it is
unlikely to deter RBI from its anti-inflationary stance. We expect RBI to continue with its rate hike cycle and expect
another 25bp hike in the monetary policy meeting in September 2011.
Event:
IIP growth in July 2011 came in at 3.3% yoy, on the back of contraction in capital goods and intermediate goods. While
mining remained muted at 2.8% yoy, growth in electricity at 13.1% yoy was in line with core 8 industries’ data.
Manufacturing growth came in weak at 2.3% yoy with three month moving average falling to 6.2% yoy as against 7.4%
yoy in the previous month. On monthly basis, without adjusting for seasonality, IIP contracted by 2.2% in July 2011.
In the use-based indices, consumption growth surprised positively at 6.3% yoy, with growth in durables coming in
strong at 8.6% yoy and non-durables at 4.1% yoy. Capital goods contracted sharply by 15.2% yoy, with three month
moving average at 9.7% yoy. While basic goods continued to be healthy at 10% yoy, intermediate goods contracted by
1.1% yoy.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
IIP for July 2011 came in at 3.3% yoy, significantly below market expectations. The underperformance was on account
of contraction in capital goods (down 15.2% yoy) and intermediate goods (down 1.1% yoy). Manufacturing growth was
also muted at 2.3% yoy as against 10.3% yoy in the previous month, with 15 of its 22 industry groups registering
positive growth. While investment momentum was weak during the month, consumption growth surprised positively at
6.3% yoy with durables growth coming in strong at 8.6% yoy. With three month moving average of IIP falling to 6% yoy
(lowest in 19 months), concerns on the extent of growth moderation would be back to the fore. However, we believe it is
unlikely to deter RBI from its anti-inflationary stance. We expect RBI to continue with its rate hike cycle and expect
another 25bp hike in the monetary policy meeting in September 2011.
Event:
IIP growth in July 2011 came in at 3.3% yoy, on the back of contraction in capital goods and intermediate goods. While
mining remained muted at 2.8% yoy, growth in electricity at 13.1% yoy was in line with core 8 industries’ data.
Manufacturing growth came in weak at 2.3% yoy with three month moving average falling to 6.2% yoy as against 7.4%
yoy in the previous month. On monthly basis, without adjusting for seasonality, IIP contracted by 2.2% in July 2011.
In the use-based indices, consumption growth surprised positively at 6.3% yoy, with growth in durables coming in
strong at 8.6% yoy and non-durables at 4.1% yoy. Capital goods contracted sharply by 15.2% yoy, with three month
moving average at 9.7% yoy. While basic goods continued to be healthy at 10% yoy, intermediate goods contracted by
1.1% yoy.
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