India Macro Weekly: Industry shows recovery, corporate results improve

For the week ending March 11, 2017:

• The important data release for the past week was the monthly industrial production number, which showed 2.7% growth in January 2017, turning around from negative growth during the previous month. However, a longer term trend for industry remains firmly close to zero rather than showing growth.
• Preliminary consolidated corporate results for private sector non-financial companies in Q3, 2016-17, available with the RBI reveal that sales showed 2.8% growth, though this is partly on account of a low base. Expenditure also grew substantially as raw material as well as power and fuel prices started rising. However, net profits continue to show robust growth,
• The centre’s tax collection numbers for the April 2016-February 2017 period showed strong growth in indirect tax collections of 22.2%, led by excise collections, while customs’ collections lag behind. Direct tax collections also showed double digit growth, though a comparatively much smaller 10.7%. Very slow corporate tax collections growth dragged down this number, despite strong income tax collections.
• The Orbis Economics Consumer Conditions Measure showed a come off in January 2017 to 101.4, the lowest in 5 months. However, any level above 100 continues to reflect improvement in conditions for consumer spending compared to the previous year.
• Data trends revealed a sharp drop in crude oil prices to below USD 50/bbl for the first time in three and a half months. Equity markets were robust.

This post is a summary of our weekly report - India Macro Weekly. To know about subscription details for the report, please write in at orbis.economics@orbiseconomics.com