InvestorQ : How were the latest core sector numbers announced on 31 December?
diksha shah made post

How were the latest core sector numbers announced on 31 December?

vidhya Laxmi answered.
2 years ago

India core sector output fell by 2.6% for the month of November 2020. This is a tad disappointing because the fall in core sector had almost come at par to -0.1% in Sep-20 before widening to -0.9% in October and now to -2.6% in November. The core sector is a basket of 8 critical infrastructure sectors with a 40.27% weight in the IIP.

Among the gainers, coal, fertilisers and electricity were the sectors to record positive growth on a YOY basis. However, it must be noted that even in these cases the growth was sharply lower compared to the month of October. In fact, the loss in growth in sectors like electricity and coal was as high as 800 basis points on a sequential basis.

The major positive news came from crude oil and refinery products where the core sector contraction was limited to about -4.5%. That is good because crude impacts nearly 45% of the core sector basket and is the key to its overall improvement. The real disappointment was the cement sector which recorded a sharp 7.5% after growing in Oct-20.

Overall core sector for the 8-month Apr-Nov period stood at -11.4%, which means we are likely to end the year with negative core sector growth. The good news came from the revised numbers which upgraded Aug-20 core sector core sector from -7.3% to -6.9% and Oct-20 growth from -2.5% to -0.9%. This provides hope for the November numbers too.