Electricity production supports IIP growth - Angel Broking

As per Quick Estimates on the Index of Industrial Production (IIP), industrial growth in January 2014 reported marginal growth of 0.1% as compared to contraction of 0.2% in the previous month and a 2.5% growth in January 2013. Healthy 6.5% growth in electricity production has supported the overall IIP performance even as the manufacturing sector continued to contract for the fourth straight month. Excluding the performance of electricity sector the IIP would have reported degrowth of 0.5% during the month. Going ahead too, the electricity sector is expected to report strong growth in February 2014 supported by a weak base. Cumulatively in the April – January period of FY2014 the IIP reported a flat performance despite modest 0.9% growth in the corresponding period of the previous year.

As per the use-based classification, Capital Goods index posted a de-growth of 4.2% as compared to a 2.5% contraction in January 2013. Consumer durables contracted (for the fourteenth straight month) by 8.3% but fared better than the 16.1% decline in production during December 2013 reflecting continued weakness in the domestic demand environment.

Source : Equity Bulls

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