How Diwali could shake up India's industrial production growth, Nomura explains

India's industrial production (IP) growth slowed to 6.7% year-on-year in September from 7.8% in August, but underlying sequential momentum remained largely stable, according to Nomura. The brokerage expects industrial production growth to remain volatile over the coming months because of differences in the timing of Diwali. "Underlying dynamics largely resilient. We expect Diwali-led volatility in coming months," Nomura said. September IP growth was below the consensus and Nomura's estimate of 7.2%.

August growth was revised downwards to 7.8% from 8.0%. Sequential momentum eased to 0.3% month-on-month on a seasonally adjusted basis in September from 0.5% in August. Manufacturing growth remained strong at 9%, while electricity and gas production growth picked up to 12.3%. Mining production contracted 5.6% year-on-year, partly reflecting an unfavourable base.