Other problems need to be tackled before IIP number: V Ashok, Essar Group

In an interview with ET Now, V Ashok, Group CFO, Essar Group, gives his views on the IIP numbers. Excerpts:-



ET Now: The IIP number is showing a very disappointing trend, 2% growth this time around.

V Ashok: Well not too disappointing.

ET Now: You are the first who is saying that.

V Ashok: My reasoning is different. March is generally about finishing year end targets and April-May are usually slack months. But yes, overall things have to go a long way to get better. The mood is still somber as the investments are not coming in, rupee is depreciating and imports are getting costlier. We need to sort out a few issues before we talk about IIP numbers every now and then. The basic problem needs to be addressed before we expect industrial production to pick up.

ET Now: What is the impact on your group per se with what the currency has done and if the rate cuts do not come around this time?

V Ashok: I do not think the earlier reduction in rate cuts have been passed to the borrowers. So we have not yet felt the effect of that itself. We are not unduly worried about the rupee movement because our balance sheets,on the two largest business groups - steel and oil and gas business - are naturally hedged. From personal view point, that (rupee depreciation) is not very good, but its effect on businesses is fairly okay. Earnings are all dollar and dollar linked so we have nothing much to worry about in terms of the balance sheet management vis-à-vis rupee depreciation.