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MOSL: Morning India (13/July/17)-1. The Big Leap – Vol-2.2-Jewelry-2. EcoScope-3. NTPC-4. Ashok Leyland-5. South India Bank

​MOrning India (13/July/17): 1. The Big Leap – Vol-2.2: Jewelry; 2. EcoScope; 3. NTPC; 4. Ashok Leyland; 5. South India Bank; 6. Results Expectation: 1. Cyient; 2. MCX; 3. TCS

Today’s top research theme

THE BIG LEAP – VOL-2.2: Jewelry - Shift likely to remain gradual; Pace can intensify with stringent cash transaction norms

India is on a structural path towards a formal economy prodded by a string of government initiatives such as demonetization, GST, and Aadhar-linking. While these are steps in the right direction, we believe the shift will be prompt for some sectors, gradual for others, and might remain challenging for a few.

We believe the shift in the ~INR3t Indian Jewelry industry will be gradual. A fragmented industry, it is dominated by the unorganized segment (estimated at INR1.2t; 70% of domestic jewelry sales), and changes in administrative procedures under the GST regime using technology are unlikely to accelerate the shift towards organized players.

Yet, a material reduction in the threshold for cash purchases without identity proof could be the catalyst, and would benefit large organized players.

Piping hot news

CPI inflation falls to record levels, IIP at three-month low

Pulled down by capital goods, consumer durables and manufacturing, and mining, the index of industrial production expanded 1.7 per cent in May, lower than the revised 2.8 per cent rate in April. CPI inflation was down to a record low of 1.5 per cent in June from 2.2 per cent in the previous month.