Motilal Oswal on economy: India's headline Consumer Price Index (CPI) inflation remained steady at 5.1 per cent year-on-year in February 2024, in line with expectations, with core inflation reaching a multi-year low of 3.3 per cent. 

However, food inflation rose to 8.6 per cent, driven by increases in vegetable and protein-based item prices. Despite this, core CPI, excluding food and beverages, saw a notable decrease to 3.3 per cent, brokerage firm Motilal Oswal said in its note.

Meanwhile, industrial output growth decelerated to 3.8 per cent year-on-year in January 2024, slightly below expectations, mainly due to lower growth in the manufacturing sector. However, the electricity and mining sectors saw higher growth.

The growth in manufacturing activity slowed to 3.2 per cent year-on-year, with a notable portion of items within the sector growing at a slower rate compared to the previous year. Output of capital goods and consumer durables remained steady, while consumer non-durables saw muted growth.

Overall, while inflation remained in line with market expectations, industrial output was slightly below projections, analysts said. 

Despite this, with continued robustness in high-frequency indicators for January and February 2024, there may be a positive surprise in GDP growth for the fourth quarter of the fiscal year 2023-24, the Mumbai-based brokerage added.

As such, no monetary policy action is anticipated based on inflation or growth expectations for the remainder of the year.