India’s real GDP growth is projected to slow to 6.2 per cent in FY26, down from 6.5 per cent in FY25, according to a report released on Monday by Japanese brokerage firm Nomura.
Nomura’s research report, quoted by PTI, highlighted a growing “divergence” between Goods and Services Tax (GST) collection growth and other high-frequency indicators such as auto sales and bank credit growth.
Official data released last week showed that real GDP growth fell to 6.5 per cent in FY25, compared to 9.2 per cent in FY24, while the Reserve Bank of India (RBI) continues to project growth at 6.5 per cent. “Our baseline view assumes GDP growth moderates to 6.2 per cent in FY26 from 6.5 per cent in FY25,” claimed Nomura's report.
Despite the moderation in growth, Nomura raised its Nifty target for March 2026 to 26,140 points, up from 24,970, citing improving macroeconomic conditions alongside valuation concerns. “The Indian equity markets have been resilient in the recent past despite corporate earnings estimate cuts and global uncertainties,” said Nomura.
“We think positive domestic macros, as reflected in the significant fall in yields and the relatively lower beta of Indian equities underpinned by consistent domestic flows, are supporting market valuation," the report added.
Meanwhile, Bofa Securities struck a more cautious tone, stating that equity market valuations appear “full” in the near term. However, it maintained a constructive long-term view, positioning India as a leading market for “stock compounders,” supported by nine structural themes including infrastructure development, productivity gains, digitisation, and financialisation.
Nomura also expressed a preference for domestic-focused sectors over exporters, given global uncertainties and the likelihood of delayed investment cycles.
While consumption stocks have underperformed since the market peak in September 2024, Nomura noted that the current environment- marked by low inflation, interest rate cuts, and income tax relief—offers supportive conditions for a rebound in consumption.
Nomura’s research report, quoted by PTI, highlighted a growing “divergence” between Goods and Services Tax (GST) collection growth and other high-frequency indicators such as auto sales and bank credit growth.
Official data released last week showed that real GDP growth fell to 6.5 per cent in FY25, compared to 9.2 per cent in FY24, while the Reserve Bank of India (RBI) continues to project growth at 6.5 per cent. “Our baseline view assumes GDP growth moderates to 6.2 per cent in FY26 from 6.5 per cent in FY25,” claimed Nomura's report.
Despite the moderation in growth, Nomura raised its Nifty target for March 2026 to 26,140 points, up from 24,970, citing improving macroeconomic conditions alongside valuation concerns. “The Indian equity markets have been resilient in the recent past despite corporate earnings estimate cuts and global uncertainties,” said Nomura.
“We think positive domestic macros, as reflected in the significant fall in yields and the relatively lower beta of Indian equities underpinned by consistent domestic flows, are supporting market valuation," the report added.
Meanwhile, Bofa Securities struck a more cautious tone, stating that equity market valuations appear “full” in the near term. However, it maintained a constructive long-term view, positioning India as a leading market for “stock compounders,” supported by nine structural themes including infrastructure development, productivity gains, digitisation, and financialisation.
Nomura also expressed a preference for domestic-focused sectors over exporters, given global uncertainties and the likelihood of delayed investment cycles.
While consumption stocks have underperformed since the market peak in September 2024, Nomura noted that the current environment- marked by low inflation, interest rate cuts, and income tax relief—offers supportive conditions for a rebound in consumption.
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