Engineering stocks are trading mixed with AIA Engineering, Shanthi Gears and Emco Ltd leading the pack of gainers. However, TRF Ltd and Welspun Corporation are trading weak. As per a leading financial daily, BHEL has signed a provisional deal of Rs 15 bn with the government of Iraq with a purpose to engage with oil and gas rich countries in West Asia that has more than 50% of world's proven reserves of crude oil. The deal will see BHEL supply 10 gas turbines of 126 MW each to Iraq. The order can increase to Rs 40 bn depending upon the scope of the work. The deal has come close to the heels of India's strategic decision to revive energy ties with Iran. The crude oil supply from Iraq will lead to further diversification our energy. India imports US$ 10 bn worth of oil from Iraq. It may be noted that BHEL is trading flat at the time of writing.
The Central Statistics Organization (CSO) has reported an increase of 7.3% YoY for India's industrial production (IIP) in March 2011. This compares to an upwardly revised 3.65% growth a month ago, thus soothing concerns of a slowdown in the economy. The actual growth numbers are above expectations and will allow the central bank to continue with rate hikes to control stubbornly high inflation. However, for FY11, the industrial output growth registered a growth of just 7.8% YoY versus a 10.5% YoY growth in FY10.
The manufacturing sector, which comprises 80% of the industrial production, was up 7.9% YoY for the month versus 16.4% YoY last year. The mining sector was marginally up by 0.2% YoY versus 12.3% YoY growth during the same month last year. The growth rate for capital goods sector also slowed down to 12.9% YoY from 36% YoY last year.
Meanwhile, the Committee of Secretaries (COS) has approved the release of the new series of index of industrial production (IIP) with 2004-05 as its base. The new index will start from the month of June 2011(which will be the quick estimate of IIP for the month of April 2011).