India can't be happy yet with the 2.4% industrial production growth

Not yet an uptrend.

According to Nomura, India‟s industrial production (IP) grew at 2.4% y-o-y in January from an upwardly revised -0.5% in December, higher than market expectations but closer to expectations (Consensus: 1.3%; Nomura: 2.2%).

The uptick came as all sub-categories improved except capital goods, with basic goods (3.4% in January from 1.8% in December) and consumer goods (2.8% from -3.6%) posting particularly sharp rebounds.

Here's more from Nomura:

We were expecting some payback due to inventory restocking after weak growth in December. However, we would caution against interpreting this as the start of an uptrend in the industrial cycle.

Monthly IP data are known to be volatile and the 3-month moving average remains subdued (0.4% y-o-y versus 2.2% in December), indicating that underlying demand momentum remains weak. At best, today's data suggest that the industrial cycle is bottoming out, in our opinion.

Separately, CPI inflation rose to 10.9% in February from 10.8% in January, higher than expected (Consensus: 10.6%; Nomura: 10.7%). Food price inflation ticked higher to 13.5% y-o-y in February (from 13.3% in January), while core CPI inflation (ex-food and fuel) rose to 8.6% (from 8.3%).

Sticky retail inflation suggests inflationary
pressures remain in the system.