Manufacturing PMI maintains momentum on the back of new orders and robust inventory turnover; Rising input cost remains a concern though

Impact: Positive(Overall Manufacturing Sentiment)

Brief: September Manufacturing PMI for India shows a sign of improvement; Subsectors such as New Orders, Orders from Abroad, Inventory clearance, Rising Staff Levels and Future Outlook have been recording continued growth. Input costs remain a concern

India's manufacturing PMI index continues on a positive path maintaining its growth outlook. The index stands at 52.2 in September, 2018 as compared to 51.7, the previous month. The index continued to be in positive trend for past fourteen months – indicating a solid growth in the manufacturing segment. On a YTD basis, the average index number has been recording 52.0 in FY19 (YTD), which was 50.9, a year earlier. The factors underpinning the overall index are new orders (both from domestic as well as foreign clients), faster inventory clearance due to strong demand, and rising staff levels. It is understood that the index consists of new orders, inventory levels, staff levels and future outlook.

The healthy performance of manufacturing sector is reflecting in the IIP index as well. The index has been expanding at 5.5% in FY19 YTD. However, the run of expansion is expected to be undermined by rising input costs. The major concerns in the coming months are weaker value of rupee and higher commodity prices (mainly crude and steel). These factors are mounting pressure on input costs. We believe that the consumer inflation (CPI), which is decelerating for the past three months, is expected to move up September onwards.


Trend in PMI Index:

Source: IHS Markit, Acuité Research

Our exciting journey started in 2005 with rating of bank borrowers most of whom were small and medium enterprises. At that time, credit rating was a concept known only to large issuers of capital market instruments. Since then, like a caterpillar transforms itself into a beautiful butterfly, we transformed to rate bonds, bank facilities of large corporates and issuers across industries. Along came many achievements - SEBI Registration in 2011, RBI accreditation in 2012, 50,000 ratings in 2018, 5,000 Bond and Bank Loan Ratings in 2017, launch of India's first Android and iPhone app to disseminate rating, tamper-proof QR-code-enabled rating rationales, and SMERA Terminal to name a few.

Now is the time to re-emphasize our increasing footprint across all segments of ratings through the launch of our new name - 'Acuité'.

The name has changed. The spirit of upholding highest standards of analytical rigour, continuous improvement, excellence in our processes and quest for innovation remains the same. We would like to re-emphasize that we will continue to work hard to provide independent, unbiased and timely opinion of highest standard.

Acuité means 'sharpness and clarity of thought and vision'. Let our research and ratings help you take decisions with confidence.


Sankar Chakraborti
CEO