India's FY26 GDP growth to slide to 6.2 pc: Nomura

Nomura

India's real GDP growth in FY26 will slide further to 6.2 per cent in FY26 from 6.5 per cent in FY25, a Japanese brokerage said on Monday.

In a research report, Nomura said there is a "divergence" between the growth in GST collections and across other high-frequency growth indicators like auto sales and bank credit growth.

As per the official data released last week, the real GDP growth came down to 6.5 per cent in FY25 from 9.2 per cent in FY24.

The RBI sees growth sustaining at 6.5 per cent, the official data showed.

"Our baseline view assumes GDP growth moderates to 6.2 per cent in FY26 from 6.5 per cent in FY25," Nomura said in its report.

The Japanese brokerage revised its March 2026 Nifty target to 26,140 points, up from the previous level of 24,970 points, on the macroeconomic trends and also sought to temper concerns on valuations.

"The Indian equity markets have been resilient in the recent past despite corporate earnings estimate cuts and global uncertainties," Nomura said.

"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 said.

American brokerage peer Bofa Securities, however, made a cautious note about equity market valuations and said that they seem to be "full" in the near term.

The brokerage, however, said it expects India to continue being the top country to deliver a high number of stock compounders and pointed out nine structural themes aiding it, including rapid infrastructure creation, productivity gains, digitisation and financialisation.

Nomura said it prefers domestic-focused sectors against exporters given the global uncertainties, and also expects the investment cycle to get delayed because of the global uncertainties.

Consumption stocks have underperformed during the market correction since the peak in September 2024, it said, adding that the current macro environment marked by low inflation, interest rate cuts and income tax cuts presents tailwinds to consumption.