CPI inflation eased in line with our expectation from a 6-year high in Oct-20 to 6.93%YoY in Nov-20, led by a softening of sequential price momentum in food along with support from a positive base. In our report, we look at Nov-20 print in detail and also focus on FYTD21 build-up in price pressures. Looking ahead, while we expect the moderation in food prices and a favourable base to continue into Q4 and FY22 respectively, we will keep a close watch on non-food segments which may slow the pace of correction in headline CPI. On balance, the augmentation of supply versus the pace of recovery of demand will remain crucial.

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