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Below the perspective on CPI Data by Mr. Nikhil Gupta, Chief Economist, Motilal Oswal Financial Group.

Oct'23 headline inflation eased to 4.9% YoY

Core inflation at 43-month low of 4.3%

* Headline CPI-inflation eased to 4.9% YoY last month broadly in line with the market forecast of 4.8% and our expectation of 4.9%

* Food inflation was unchanged at 6.6% YoY in Oct'23, implying the core inflation softened to 43-month of 4.3%.

* Details suggest that the declaration was broad based:

-- Standard core inflation (ex food & energy) was down to 40-month low of 4.4%

-- CPI inflation ex veggies was down to 5%, the lowest in 46 months

-- Inflation in core services (weight = 13%) was 3.4%, the lowest since the data is available from 2015

-- Only 34.5% of CPI basket posted 6%+ inflation, the lowest since early 2021.

Going forward, we believe that headline inflation has troughed. We expect it to rise to 5.5-6% in Nov-Dec'23 and stabilise at ~5.2% in 4QFY24. Thus, we don't see any relaxation in the monetary policy by the RBI next month or the next few months.

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