FY11 growth should be over 8% | Extent of eco recovery will be surprising

FY11 growth should be over 8%; extent of eco recovery will be surprising; rate hike by RBI ruled out, CRR an option; WPI tgt for March 2010 at 7-7.5%: Macquarie Cap Sec

Rajeev Malik of Macquarie Capital Securities said that India growth expectations will be revised upwards. IIP should be seen upwards of 8% for next few months. He feels that India’s FY11 growth should be over 8%.

He further said that the extent of economic recovery will be surprising. Non-Agri growth is expected to remain strong. Rate hike by the RBI is ruled out, instead CRR is an option. CRR, if hiked, may be done in December. He placed WPI target for March 2010 at 7-7.5%.

Macquarie Capital Securities expect September IIP figure at 7.5% (YoY). It feels that a hike in policy rates at October meet unlikely. However, it feels that CRR hike can not be totally ruled out.

August IIP numbers saw robust growth. It stood at 10.4% Vs 7.2% (MoM). August Electricity growth stood at 10.6% Vs 0.8% (YoY), August Mining growth stood at 12.9% Vs 2.8% (YoY), August Capital Goods growth stood at 8.3% Vs 0.9% (YoY), August Consumer Goods growth stood at 8.5% Vs 6.4% (YoY) and August Manufacturing Output growth stood at 10.2% Vs 1.7% (YoY).

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