Nirmal Bang expects India's GDP growth for Q2 FY26 at 7%, higher than its earlier estimate of 6.5%, supported by strong festive demand and robust manufacturing activity. The brokerage has also revised FY26 GDP growth upward to 7% from 6.5%, citing better-than-expected performance in the second quarter.
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Nirmal Bang Report
Nirmal Bang revises up FY26 GDP growth estimate to 7% from 6.5% supported by a better than expected Q2 FY26 growth and strong festive demand.
While GDP growth remains relatively healthy on the back of monetary and fiscal policy support, growth in H2 FY26 may slow on a higher base, even as festive demand has been robust. With inflation likely to undershoot the RBI's estimate, the brokerage sees room for a 25bps rate cut in December.
Consumer Price Index inflation in FY27 is unlikely to exceed 4%, which implies high real rates in an environment of global volatility and uncertainty.
50 basis points of easing by the US Federal Reserve also bolsters the case for easing by the RBI. While room exists for easing of up to 50bps, RBI is likely to be cautious with further rate cuts.
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