The core sector, comprising eight key infrastructure industries, experienced a significant growth of 6.7% in February, marking a three-month high. This surge was driven by sectors such as crude oil (7.9%), refinery products (2.6%), and electricity (6.3%).
Double-digit growth was observed in coal (11.6%), natural gas (11.3%), and cement (10.2%). However, steel output decelerated to 8.4%, while fertilizer production contracted for the second consecutive month, declining by 9.5%.
The cumulative growth of the core sector for the April-February period stood at 7.7%, slightly lower than the 8.2% recorded during the same period in the previous financial year.
Experts attribute the strong performance to all-round growth across most sectors, except for fertilizers. The high-base effect and the harvest season have contributed to the decline in fertilizer demand.
The growth in steel and cement reflects the expansion in the construction sector, while the auto industry has also boosted steel demand. The electricity sector's growth is expected to drive IIP growth to between 4 and 5%.
Analysts anticipate that the core sector's uptick will lead to an improvement in IIP growth to around 5.5% in February, up from 3.8% in January. The robust growth in coal, steel, and cement, supported by government capital expenditure, is expected to continue in the coming quarters as private investment picks up.