Published on 11/07/2020 5:59:34 PM | Source: Motilal Oswal Financial Services Ltd

Third consecutive high double digit IIP decline in May`20 - Mr. Nikhil Gupta, Motilal Oswal

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Below is the Views On IIP numbers by Mr. Nikhil Gupta, Chief Economist at Motilal Oswal Financial Services


Third consecutive high double digit IIP decline in May’20

* IIP contracted 34.7% YoY in May’20 broadly in line with our expectation of ~38% and v/s a decline of 57.6% in Apr'20. 

* Just like in previous two months, the decline in IIP was led by across-the-board contraction in all the major components.

* While mining activities fell ~21%, manufacturing sector declined ~39.3%, lower than our forecast of ~43%.

* Infrastructure/construction activities and capital goods production still declined in the range of 40-60% and consumer durables contracted more than two-thirds in May'20.

*Going ahead, while Jun’20 appears to be a far better month, we expect IIP to continue declining for another 3-4 months. Jun'20 IIP is likely to have contracted by another 20-30%.


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