India’s Infrastructure Output Grew 5.2% in September 2017; Stocks to Watch-out Tomorrow

Indian Economy saw its infrastructure output grow by 5.2% in September 2017 as compared to last year on the back of high production of coal & refinery products. This growth has been the highest this year since April.

Infrastructure output growth stood at revised 4.4% (YoY) in August and 2.3% in July showing overall improvement post demonetization and GST implementation.

On a cumulative basis, the infrastructure output is 3.3% for the first six months of FY2018 as compared to 5.4% for last year.

India’s eight infrastructure sectors include coal, crude oil, natural gas, refinery products, electricity, steel, cement, and fertilizer, account for about 40 percent weight in the index of industrial production (IIP).

The IIP along with infrastructure output had made a comeback in August with a growth of 4.3% from 1.2% in July. And now with encouraging record growth infrastructure output, IIP looking to be strong as well for September.

Sectors	Growth %(YoY)
Crude Oil	0.1%
Natural Gas	6.3%
Coal Production	10.6%
Refinery Products	8.1%
Electricity	5.2%
Steel	3.7%
Cement	5.37%
Fertilizers	(-) 7.1%

 

It looks to be having a positive impact on the economy as the most stressed sectors are power, steel and textile.

Stocks to Watch-out for tomorrow

These few stocks look to be ready for an up-move except for Fertilizers based on the output released by the government for September as they would be most likely performing better in FY2018.

Crude Oil, Refinery & Natural Gas Related stocks

1. ONGC
2. GAIL
3. Petronet LNG
4. IGL
5. Gujarat Gas

Coal Production

1. Coal India
2. Foundry Fuel Products
3. GMDC Limited
4. KCL
5. Gujarat NRE Coke

Electricity

1. Torrent Power
2. Reliance Infrastructure
3. Tata Power
4. Power Grid Corporation of India
5. NTPC
6. Adani

Steel

1. Tata Steel
2. JSW Steel
3. Jindal Steel & Power
4. SAIL

Cement

1. Ambuja Cements
2. India Cements
3. ACC
4. Ramco Cements
5. Prism Cement
6. Birla Corp
7. J K Cement

Fertilizers

1. GNFC
2. GSFC
3. Chambal Fertilizers
4. Bharat Agri
5. Zuari Agro Chem
6. NFL

These are the sectors which have seen the slowdown and majorly own to the banks’ NPAs. A good growth gives a hope for economy coming to terms if not growing at spectacular rates.

At the same time, in all the news of negative private sector investment growth, economic slump, number of jobs going down and higher NPAs, this does come as a good news for PM Narendra Modi led BJP government and it would a booster if IIP numbers are also as good as infrastructure output.