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Jefferies Sees India GDP Growing 6.5-7% This Fiscal Year

3 hours ago

Brokerage Jefferies projects India's real GDP will grow 6.5-7% this fiscal, with corporate earnings set to climb to 17% by the year starting April 2027.

India's economy is set to expand at a real rate of 6.5-7 per cent in the current fiscal year, with nominal growth reaching roughly 11-12 per cent, according to a new assessment from brokerage Jefferies. The firm said the country's underlying growth engine remains firmly in place, holding up better than many had anticipated even as geopolitical tensions and high energy costs weigh on the outlook.

The brokerage also forecast that company profits will strengthen further, with corporate earnings growth quickening to 17 per cent in the financial year that starts in April 2027. That would mark a step up from an estimated 14 per cent expansion in the current year, a pickup Jefferies tied to the improving trajectory in nominal GDP.

Lending figures formed a central plank of the brokerage's case. Bank credit climbed 19.1 per cent year-on-year at the close of August, while lending to companies advanced 21.6 per cent in July. Credit extended to micro, small and medium industrial enterprises jumped 24.9 per cent, backed by an 17.8 per cent rise in deposits during August.

Jefferies read the acceleration in SME borrowing as an early sign that recent policy moves are starting to pay off. The firm pointed to changes in the goods and services tax regime, labour reforms and steps to make doing business easier as factors now feeding through into stronger loan demand. The rise in corporate borrowing, it added, hints that the private investment cycle businesses have long deferred may finally be turning.

Power use and home sales climb

Consumption at home has stayed strong, the brokerage said. GST receipts grew 14.8 per cent from a year earlier in August, a marker of steady spending across the economy. Electricity demand told a similar story, expanding 9.4 per cent between April and August against a much slower 1.8 per cent in the first three months of the calendar year.

The property market added to the picture. Home sales across the seven largest cities rose 7 per cent year-on-year over the first seven months of 2026, reversing a 1 per cent slide recorded in 2025. Jefferies expects the firmer nominal growth backdrop to carry corporate earnings from 14 per cent this year up to 17 per cent in the fiscal year beginning April 2027.

Oil prices the main threat

The brokerage flagged energy as the clearest danger to its forecasts, warning that events in the Middle East could push fuel costs higher. Brent crude traded near $106 a barrel when the report was prepared, and problems along important shipping lanes for oil were straining supply.

So far, Jefferies said, India has sidestepped serious disruption to its energy supplies. The country has kept buying Russian crude at a discount while at the same time stepping up imports of American energy, spreading its sources rather than leaning on any single supplier.

On monetary policy, the brokerage expects the Reserve Bank of India to lift its benchmark repo rate by 50 basis points before the end of 2026. That would take the rate up from its current level of 5.25 per cent, a tightening the firm sees as consistent with the economy's steady momentum.

India GDP growth, Jefferies India report, corporate earnings 2027, India bank credit, RBI repo rate, GST collections India, Indian economy 2026, private capex cycle

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