Expect IIP to remain muted for rest of FY13: CRISIL
CRISIL Research has come out with its report on Index of Industrial Production (IIP) data. According to the research firm, industrial output growth is expected to remain at muted levels during the remaining months of this fiscal.
December 12, 2012 / 18:39 IST
CRISIL Research has come out with its report on Index of Industrial Production (IIP) data. According to the research firm, industrial output growth is expected to remain at muted levels during the remaining months of this fiscal.
IIP: Aided by low base, IIP in October grew at its fastest pace in a yearIndustrial output grew at a better than expected rate of 8.2 per cent in October 2012. Low base and festive demand helped IIP to clock its fastest growth in about a year. At broad based level, barring mining and quarrying, growth across other sectors has been good. Even at the use based level, with the exception of basic goods, growth has been robust in other sectors during October 2012 with consumer durables clocking a growth of 16.5 per cent. However, it is too early to believe that this type of buoyancy will sustain going forward. As the current industrial slowdown is both well entrenched and broad based, it will take a while for industrial growth to recover. Therefore, we expect industrial output growth to remain at muted levels during the remaining months of this fiscal. The industrial contraction of the previous month has now been revised upwards to 0.7 per cent from 0.4 per cent reported earlier.Manufacturing, having the highest weight in the IIP, grew at 9.6 per cent in October 2012. In spite of a low base of last year mining and quarrying contracted by 0.1 per cent. Electricity output grew by 5.5 per cent. Consumer durables and non-durables sector grew at 16.5 and 10.1 per cent respectively, resulting in an overall growth of 13.2 per cent for consumer goods sector in October 2012.Output of the eight core infra industries grew by 6.5 per cent in October. Natural gas was the worst performer with its output contracting by 14.9 per cent, while output of refinery products posted the highest growth of 20.3 per cent. Weak performance of the core sector has been adversely impacting overall industrial performance through its various linkages with the other sectors.Commercial vehicle sales contracted by 8.9 per cent in November 2012. This is the second time sales of commercial vehicles have contracted this fiscal. So far, the sales of commercial vehicles in the current fiscal has remained weak and the trend is expected to continue in the remaining months of this fiscal as well.Exports growth has been negative since May 2012. In November 2012 exports contracted by 4.2 per cent.Equity and Company Research- Largest independent equity research house in India, focusing on small and mid-cap companies; coverage exceeds 100 companies
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Disclaimer: CRISIL Limited has taken due care and caution in preparing this Report. Information has been obtained by CRISIL from sources, which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL Limited has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this Report. The Centre for Economic Research, CRISIL (C-CER) operates independently of and does not have access to information obtained by CRISIL's Ratings Division, which may in its regular operations obtain information of a confidential nature that is not available to C-CER. No part of this Report may be published / reproduced in any form without CRISIL's prior written approval.The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.To read the full report click on the attachment 
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