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Economic Times
5 days ago
- Business
- Economic Times
IIP growth slows to 8-month low in April over decline in mining output
Agencies Only 11 of 23 mfg sectors had higher on-year growth than overall output growth in April NEW DELHI: India's industrial production growth fell to an eight-month low of 2.7% in April, dragged down by a contraction in mining output, high base effect and moderation in electricity production, official data released on Wednesday showed. The Index of Industrial Production (IIP) had expanded 3.9% in the previous month and 5.2% in April 2024. Manufacturing grew 3.4% in the first month of 2025-26 on the back of a solid expansion in the automobile sector. While mining output contracted 0.2%, electricity generation increased a muted 1.1% year-on-year in April. Within the manufacturing sector, 16 out of the 23 industry groups recorded positive growth. "The slowdown, albeit mild, was broad-based driven by a weaker performance across all the three production sectors," said Aditi Nayar, chief economist, ICRA. Only 11 of the total 23 manufacturing sub-sectors had a higher on-year growth than overall output growth in April, illustrating the skewness in industrial growth, according to Paras Jasrai, economist at India Ratings and Research. The silver lining in the data was the consumer durables and capital goods sector. The 6.4% expansion in consumer durables was driven by a 10.5% growth in electronic goods ahead of the upcoming marriage season. The auto sector reported a solid 15.4% growth. However, consumer non-durables output declined 1.7%, highlighting the urban-rural divide."Going ahead, the domestic consumption landscape remains a key monitorable due to the prevailing unevenness in demand recovery... the continued improvement in the inflation scenario led by easing of food inflation is a key tailwind for the demand recovery," said Rajani Sinha, chief economist, CareEdge Ratings.A 20.3% increase in capital goods was supported by both electrical and non-electrical machinery. "It needs to be seen if this is maintained in the coming months as one is looking at investment to pick up," said Madan Sabnavis, chief economist, Bank of Baroda. Infrastructure and construction goods output increased 4% in April while primary goods saw a marginal contraction of 0.4 %."On the whole the performance is encouraging and it will be important that there is further pickup in coming months," Sabnavis expect the unseasonal rains to impact construction goods output and keep factory output growth under 2% on-year in May.
Time of India
5 days ago
- Business
- Time of India
IIP growth slows to 8-month low in April over decline in mining output
NEW DELHI: India's industrial production growth fell to an eight-month low of 2.7% in April, dragged down by a contraction in mining output, high base effect and moderation in electricity production, official data released on Wednesday showed. The Index of Industrial Production ( IIP ) had expanded 3.9% in the previous month and 5.2% in April 2024. Manufacturing grew 3.4% in the first month of 2025-26 on the back of a solid expansion in the automobile sector. While mining output contracted 0.2%, electricity generation increased a muted 1.1% year-on-year in April. Within the manufacturing sector , 16 out of the 23 industry groups recorded positive growth. "The slowdown, albeit mild, was broad-based driven by a weaker performance across all the three production sectors," said Aditi Nayar, chief economist, ICRA . Only 11 of the total 23 manufacturing sub-sectors had a higher on-year growth than overall output growth in April, illustrating the skewness in industrial growth, according to Paras Jasrai, economist at India Ratings and Research . Live Events The silver lining in the data was the consumer durables and capital goods sector. The 6.4% expansion in consumer durables was driven by a 10.5% growth in electronic goods ahead of the upcoming marriage season. The auto sector reported a solid 15.4% growth. However, consumer non-durables output declined 1.7%, highlighting the urban-rural divide. "Going ahead, the domestic consumption landscape remains a key monitorable due to the prevailing unevenness in demand recovery... the continued improvement in the inflation scenario led by easing of food inflation is a key tailwind for the demand recovery," said Rajani Sinha, chief economist, CareEdge Ratings. A 20.3% increase in capital goods was supported by both electrical and non-electrical machinery. "It needs to be seen if this is maintained in the coming months as one is looking at investment to pick up," said Madan Sabnavis, chief economist, Bank of Baroda . Infrastructure and construction goods output increased 4% in April while primary goods saw a marginal contraction of 0.4 %. "On the whole the performance is encouraging and it will be important that there is further pickup in coming months," Sabnavis said. Economists expect the unseasonal rains to impact construction goods output and keep factory output growth under 2% on-year in May.
Business Standard
6 days ago
- Business
- Business Standard
India Ratings and Research affirms Prism Johnson's rating at 'A+/A1+' with 'positive' outlook
Prism Johnson (PJL) said that India Ratings and Research has affirmed the company's long-term rating at 'IND A+' with 'positive' outlook. The agency has also affirmed the companys short-term rating at 'IND A1+. India Ratings and Research stated that the positive outlook reflects the likelihood of an improvement in PJLs operating profitability in FY26, after a subdued FY25, leading to an improvement in its credit profile. The fall in realisations amid a tepid demand and an increasing competitive intensity, led to a fall in EBITDA in FY25, as against the agencys expectation of an improvement. However, the agency expects an improvement in cement demand and increased realisations, coupled with cost optimisation measures, across segments to result in an improvement in the EBITDA in FY26. Furthermore, despite the fall in the EBITDA, the company reduced its net debt by monetising non-core assets in 4QFY25, resulting in a flattish net leverage. The interest coverage, which fell in FY25 due to a lower EBITDA, is likely to improve in FY26 with the recovery in EBITDA and debt reduction. The liquidity remains adequate with sizeable, unencumbered cash and equivalents and unutilised bank lines. The agency further said that a substantial improvement in the operating performance and profitability, along with the adjusted net leverage reducing below 2.0x, on a sustained and consolidated basis, could be positive for the ratings. However, a weaker-than-expected operating performance and/or higher-than-expected capex, leading to the adjusted net leverage remaining above 2.0x, on a sustained and consolidated basis, could be negative for the ratings. Prism Johnson (PJL) is a leading manufacturer of building material such as cement, RMC, and ceramic tiles in India. It also has interests in building materials, sanitary-ware and insurance through subsidiaries and joint ventures. The scrip rose 0.63% to currently trade at Rs 142.65 on the BSE.
Indian Express
21-05-2025
- Business
- Indian Express
As core sector growth hits 8-month low in April, a cascading impact likely on factory output
India's key infrastructure-linked industries in April showed a sharp deceleration, with their output rising just 0.5 per cent from a year ago, the commerce ministry said on Tuesday. At 0.5 per cent in April, the growth of the eight core sectors — coal, crude oil, natural gas, refinery products, fertilisers, steel, cement, and electricity — was not only well below 4.6 per cent in March, but was the lowest in eight months. Six out of eight sectors falter Vagaries of the base effect apart, there are real concerns about the weak infrastructure output growth. Of the eight sectors, the performance of six weakened in April compared to March, with refinery products faring the worst after their production was down 4.5 per cent, the poorest showing since November 2022. The two sectors which saw improved production rates did so only because what came before: natural gas output was up 0.4 per cent after a 12.7 per cent contraction in March, while production of coal rose by 3.5 per cent, up from a 1.6 per cent rise the previous month. Coal output is likely to slow down post June, once the monsoon sets in across parts of the country. 'Economic uncertainty' The bad start to the new financial year seems to have been partially driven by the 'unprecedented economic uncertainty' caused by the US' 'tariff tantrums', according to Paras Jasrai, economist and associate director, India Ratings and Research. And while the reciprocal tariffs were put on hold on April 9, core sector growth – and industrial growth in general – still faces headwinds. Next week on May 28, the statistics ministry will release industrial production data for April. After edging up marginally to 3.0 per cent in March, industrial growth may have more than halved last month, going by the performance of the eight core sectors which make up 40 per cent of the Index of Industrial Production. According to Teresa John, deputy head of research and economist at Nirmal Bang Institutional Equities, IIP growth could be as low as 0.1 per cent in April, which would also be an eight-month low. Other datasets To be sure, core sector data isn't the only number that is suggestive of weakness in factory output last month. For instance, power generation in April was down 1.8 per cent from a year ago, with lower-than-normal temperatures bringing down daily power generation by 2.5 per cent year-on-year as of May 19, Jasrai of India Ratings and Research pointed out. On the other hand, the government's capital expenditure should support certain sectors, such as cement. In April, cement production was up 6.7 per cent, as per this week's core sector data.
Business Standard
16-05-2025
- Business
- Business Standard
India Ratings revises rating outlook of Bajaj Healthcare to 'stable'; affirms rating at 'A-
Bajaj Healthcare (BHL) said that India Ratings and Research has revised the outlook on the company's bank facilities to 'stable' from 'negative' while affirming the ratings at 'IND A-'. The agency has affirmed the companys short-term rating at 'IND A2+. India Ratings and Research stated that the outlook revision reflects strong growth in BHLs revenue and profitability in 9MFY25, coupled with the equity infusions during FY25-FY26 through preferential equity share allotment and share warrants, leading to the repayment of debt and funding for capex requirements. India Ratings notes the equity infusions have led to a significant improvement in the companys credit metrics, with its leverage remaining below 2x over the near to medium term. The ratings reflect BHLs improving business mix, led by diversification in higher margin business formulations coupled with revenue emanating from contract development and manufacturing organisation (CDMO) business which has a long term visibility of supplies and profitability. The agency notes although active pharmaceutical ingredient (API) pricing has stabilised, competition from China in its key products will continue to remain a monitorable. As per the management, BHL has backward integration in its large molecules which will offset any further pricing challenges. The agency will monitor the improvement in the working capital cycle and its impact on the credit metrics in the near term. India Ratings further said that a significant increase in the scale of operations and the profitability while improving the gross working capital cycle, resulting in the net leverage reducing below 2.0x, on a sustained basis, could lead to a positive rating action. However, a significant decline in the scale of operations and the EBITDA margins, along with deterioration in the gross working capital cycle, liquidity position and overall credit metrics, with the net leverage remaining above 3.0x, all on a sustained basis, will be negative for the ratings. Bajaj Healthcare manufactures APIs and branded and generic formulations. It has five API manufacturing plants, located in Tarapur, Maharashtra, and Vadodara in Gujarat: one manufacturing plant of finished formulations in Vadodara, Gujarat and one manufacturing plants of intermediates in Tarapur, Maharashtra. The scrip shed 0.86% to currently trade at Rs 553.60 on the BSE.
