SBI Composite Index for March 2015

In continuation to the launch of the SBI Composite Index on December 9, 2014, State Bank of India herewith releases yearly as well as monthly Composite Index value for the month of March 2015.

The yearly SBI Composite Index for March 2015 inched up to 54.6 (Moderate growth) from 53.5 (Moderate growth) in February 2015, a 6-month high. In contrast, the Monthly Index that slipped from 52.6 in January 2015 (Moderate growth) to 47.6 in February 2015 (Low decline) has shown a month on month robust growth of 58.5 (High growth) in March 2015, highest in last 48 months. Robust recovery in the month on month index may be attributed to seasonal factors as March sequential momentum is always higher.

However, revival in the Automobile Sales, Capital Goods and Basic Goods production and possible upturn in the credit offtake to micro and small corporates segment, real estate, NBFCs and Construction sector highlights possible sustainable recovery in the economic activity in coming months. Manufacturing activity is getting robust with a positive growth for the third consecutive month (Since November 2014). IIP has averaged 3.2% growth since November 2014. We believe that if February and March numbers also reveal moderate growth as per our prognosis, then April numbers will be most crucial. A robust SBI Composite Index for April 2015 (to be released aftermath April 10, 2015) may provide the vindication to sustainability of current IIP numbers, assuming February & March numbers are as per our forecast.

However, on the flip side, consumer durable sales continue to be a drag. Interestingly, growth in credit card outstanding continue to push up credit growth. The Index captures two components of the manufacturing cycle namely month-on-month and year-on-year growth on a scale of 0 to 100. Index above 50 implies growth over previous respective period and less than 50 will suggest a contraction over respective period.