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Saturday, April 11, 2015

India IIP:Of Troughs and Crests

IIP for February 2015 is 5% against survey prediction of 3% and prior fig of 2.6%(revised to 2.8%).Capital Goods up 8.8% holding out some hope for the capital goods sector.

As seen on the right its been an up and down ride this past year despite the stockmarkets having one of their best periods with the Nifty returning 27% annualized.The midcaps and smallcaps having gone over the top.
TOI 11th April

Would you like to buy Bosch(an auto component company) at a 
 of 80...?A profit of 1100 Cr on a market cap of approximately
77,000 Cr...?

We have many such examples in the market ever since the new
dispensation came to power and despite a few desultory tweets
expressing impatience at the current government's apparent
slow progress on the pre poll agenda the general positive
sentiment remains.

Strange to talk of 'green shoots'when in one year the 'shoots'
should have become 'green stalks'...!

For all the talk of 'Make in India',there has been no coherent
push in terms of on the ground reforms.

I remember talking to clients about this great push coming in
infrastructure development-roads,highways,ports,SEZs etc

In two decades,Haldia,the premier port in the East is but a
shadow of itself with only 3 slots handling goods with tonnage
handled down by 55%.Labour issues,shallow draft at the
Sandheads not allowing ULCs through and the business
moving further south and onto the western seaboard are
but mere excuses.

The much touted flow of Chinese merchandise flowing through Nathula has not materialized.Calcutta Port is in much worse shape and there is no escape in sight.Other than Gujarat I do not think any state has made any appreciable progress in terms of industrialization in the past five years.

We continue to live on hope and rhetoric!!