Expect to see the industrial sector firing on all cylinders in H2FY22 - Acuite Ratings

Mr Suman Chowdhury, Chief Analytical Officer, Acuite Ratings & Research comments on Core Sector- Oct'21 Data

"The growth in the core sector has witnessed a revival in Oct-21 at 7.5%YoY as compared to a moderation seen at 4.5%YoY in Sep-21. What is pleasantly surprising is the sharp sequential growth of the core index at 7.3% driven by a massive recovery in coal production along with healthy sequential growth in output in cement, fertilisers and refinery products. Except for electricity generation which has seen a slight sequential contraction due to both seasonal factors and the earlier coal shortage, there has been a broad based growth across all the core segments, raising hopes of an improving momentum in industrial activity.

What is also worthwhile to note is the core sector output has decisively exceeded the pre-pandemic levels with the weighted average index in Apr-Oct'21 higher by 0.6% as compared to Apr-Oct'19. Six segments of the core sector have shown healthy positive growth over this seven month period vis-à-vis that in FY20 except for crude oil and refined petroleum products.

While we expect to see the industrial sector firing on all cylinders in H2FY22, this may get partly constrained due to raw material shortages, higher commodity prices and logistical challenges arising out of any fresh pandemic wave."

Source : Equity Bulls

Keywords

AcuiteRatings Economy H2FY22 CoreSector October2021