India IIP for August 2020 - Angel Broking

Mr. Jyoti Roy - DVP - Equity Strategist, Angel Broking Ltd

"India IIP for the month of August contracted by 8.0% YoY as compared to a contraction of 10.7% in July while IIP for the first five months of FY2021 has contracted by 25.0% YoY. The contraction for the month of August was largely along expected lines given that supply chains were yet to normalize fully in August. The mining and manufacturing sectors witnessed contraction of 9.8% and 8.6% YoY while electricity contracted by 1.8% YoY. However we expect IIP to improve further in October due to given pent up demand, inventory push prior to the festive season and further opening up of the economy under unlock 5.0. The recovery is already being reflected in high frequency data like Auto sales and PMI numbers. Auto companies reported another month of strong sequential growth with Maruti Suzuki reporting a 30.8% YoY increase in August domestic sales while Hero Motocorp reported a 16.9% YoY growth in motorcycle sales. The manufacturing PMI for August at 56.8 was the highest since January 2012 and points to a sharp expansion in manufacturing activity in September."

Source : Equity Bulls

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