*IIP growth rises to 4.2% in April* India's industrial output | DK Technical Analysis by Dhananjay Kadam

*IIP growth rises to 4.2% in April*

India's industrial output grew by 4.2 percent in April, data released by the Ministry of Statistics and Programme Implementation showed on June 12.

At 4.2 percent, the latest industrial growth figure as per the Index of Industrial Production (IIP) is significantly higher than that for March, when it had come in at a five-month low of 1.1 percent. That number has now been revised to 1.7 percent.

IIP growth was 6.7 percent in April 2022.

The sharp up-tick in IIP growth in April was a surprise, given the unseasonal rains that could have hampered activity in sectors like mining - where output grew by 5.1 percent, down from 6.8 percent in March.

However, the manufacturing sector picked up in the first month of the new financial year, as production rose by 4.9 percent year-on-year compared to an increase of 1.2 percent in March.

Output of the manufacturing sector accounts for more than three-fourth of the IIP.

The third sector, electricity, saw production decline for the second straight month in April, following up March's 1.6 percent fall by 1.1 percent.

However, in sequential terms, electricity generation was the only one to increase in April - by 2.3 percent - compared March. Mining output contracted by 20.6 percent, manufacturing by 6.1 percent, and total industrial output by 7.4 percent from the last month of 2022-23.

Production activity is usually weaker in April compared to March.

Going by the use-based classification of goods, the performance was mixed, with three of the six categories posting weaker numbers in April. However, this is an improvement from March, when five of the six categories had seen a deterioration in the year-on-year change in output growth.

The category which saw a huge turnaround in April was consumer non-durable goods, whose output surged by 10.7 percent after having contracted by 2.7 percent in March. Growth in production of infrastructure goods was also in double-digit territory - 12.8 percent as against 7 percent in March.

On the other hand, output of consumer durables contracted for the fifth month in a row, this time by 3.5 percent. This, according to CareEdge Chief Economist Rajani Sinha, is indicative of weakness in discretionary spending.

"While the strong double-digit growth witnessed in the output of consumer non-durables is a positive development, we will have to wait and see if this momentum is sustained," Sinha added.