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  • Economy Research | CPI and IIP: Core concerns continue for retail inflation

    Publish date: 13th June, 2018

    We believe that the consumer price inflation (CPI) touched the 5% mark in June. Although we expect the CPI levels to slide marginally to 4.8% by March 2019, there are a few potential banana skins it needs to evade before that happens. High core inflation, effect of increased MSP to farmers and poor monsoon are some such factors that can trip our estimate.

    The increase in retail prices is set to make the central bank hawkish as well. We expect the Reserve Bank of India (RBI) to announce another 25 bps rate hike in August.

    But a lot has happened during that period. The company’s stocks have increased by 18% and its valuation has hit the ceiling. We don’t expect any advantages in buying the stocks at current levels.

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