By Ruma Dubey

Today’s IIP number for the month of April also seemed like cocking a snook at all the analysts and brokerage houses. At 4.1%, this was much higher than most analyst estimation of 1.2 to 1.5%. This was way ahead of the entire pack.

On the other hand, Consumer Price Index (CPI) for May was as per most estimation at 5.01% v/s 4.87% in April. Retail food inflation came down a bit from 5.11% to 4.8% (MoM). Food inflation was higher in the urban areas at 4.84% and 4.74% in rural parts. Overall inflation in urban areas was at 4.41% while that in villages stood at 5.52%.

The surge in IIP in April could be attributed to the growth in capital goods sector at 11.1% and 3,1% growth in consumer durables. This IIP number of April has now sparked hopes that yes, the much awaited recovery is indeed on its way and we are most certainly seeing some good green shoots.

In terms of industries, 16 out of the 22 industry groups in the manufacturing sector have shown positive growth during the month of April 2015 (YoY). The industry group ‘Machinery and equipment’ showed the highest positive growth of 20.6%, followed by 16.2% in ‘Wood and products of wood & cork except furniture; articles of straw & plating materials’ and 13.4% in ‘Electrical machinery and apparatus.

On the other hand, industry group of ‘Office, accounting & computing machinery’ has shown the highest negative growth of -36.5%, followed by -34% in ‘Radio, TV and communication equipment & apparatus’ and -26.7% in Tobacco products.

Some of the important items showing high positive growth in April (YoY) was ‘Plastic machinery including moulding machinery’ (266.4%), ‘H R Sheets’ (157.5%), ‘Paraxylene’ (95%), ‘Conductor, Aluminium’ (92.0%), ‘Cashew Karnels’ (52.4%), ‘Vitamins’ (48.3%), ‘Boilers’ (40.3%), ‘Air Conditioner (Room)’ (34.4%), ‘Copper and Copper Products’ (33.4%), ‘Tea’ (33.2%), ‘Carbon Steel’ (32.5%), ‘Block Board’ (26.3%), Three-Wheelers (Including passenger and goods carrier)’ (24.0%) and ‘Sugar’ (22.9%).

Some of the other important items showing high negative growth are:‘Cigarettes’ [(-) 52.8%], ‘Grinding Wheels’ [(-) 46.5%],‘Computers’ [(-) 46.4%], ‘Telephone Instruments (incl. Mobile Phones & Accessories)’ [(-)43%, ‘Cement Machinery’ [(-) 38.9%], ‘Tractors (complete)’ [(-) 35.2%], ‘Aviation Turbine Fuel’ [(-) 29.3%] and ‘Aerated Waters and Soft Drinks’ [(-) 23.5%].

It might a tad too early to start seeing green shoots as for the second month in a row, the output of the eight core sector industries fell 0.4% due to poor performance of electricity, cement, refinery products and fertilizer sectors. Crude oil and natural gas also recorded a much lower output in April.

For the markets, both these data will go down well but expecting a rate cut so soon on the back of these numbers would be too immature. As we said earlier and reiterating again, the effect of the base effect will remain till August. And we need to wait till July to ensure monsoon does not play truant.

Well, it’s a weekend; so best to put the worries and joys of market aside and enjoy life. Monday is another day and hopefully, the market will react positively to these numbers, barring any other unforeseen situations.