Fairval

Notes on Indian equities, sectors and economy

Do we have a real slowdown in India?

Posted by fairval on March 26, 2008

Last 2-3 days of sharemarket may suggest that bullishness is returning to the markets, but real economy numbers have no cheer at the moment.

A recent Citi report says this about the aviation sector —

Domestic passenger growth over Jan-Feb08 has declined to 11.5% YoY, following 14% Y/Y growth in Dec – in stark contrast to the 30%Y/Y growth exhibited over Apr-Nov 07. This is the third month of relatively slower growth, and does not augur well for the domestic aviation industry – especially over FY09 – given that seat capacity is forecast to grow at >20%. Airline managements are now concerned – if this trend persists into Mar-Apr 08 we think there will be considerable pressure on airlines to defer capacity induction in FY09E.

There is minor anecdotal evidence of slowdown in business travel. Downtown Mumbai hotels have occupancy down to 50% or so, it appears. Is this a blip, or symptoms of a wider slowdown? Another piece – truckers are saying business is slowing..

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One Response to “Do we have a real slowdown in India?”

  1. l_0oio0_l said

    Hi,Would you be able to give links related to Hotel’s slowdown and Trucker’s slowdown too. Would be really interesting to explore Trucker’s slowdown. That slow down would even indicate increase in common comodity pricing. Also good to consider would be How Rail transportation is comming along….is that going through a slow growth phase too?

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