India’s GDP Grows 7.8%, Investment Momentum Holds As Oil Risks Loom

Mumbai: India’s economic expansion remains supported by domestic demand, investment and infrastructure spending, according to Bajaj Broking Prive’s outlook.

Real GDP grew 7.8% in Q1FY27, while Gross Fixed Capital Formation increased 11.9%, indicating that investment outpaced economic growth.

Investment’s share of GDP rose to 34.3% from 31.4% a year earlier. Central government capital expenditure increased 24%, with activity expanding across transport, power, metals, data centres and manufacturing.

Bank Credit Supports Expansion

Scheduled commercial bank credit grew 18.13% annually for the fortnight ending September 15, 2026, while deposits increased 17.31%. Outstanding credit reached ₹223.29 trillion and deposits stood at ₹276.23 trillion.

Services credit led growth in August at 24.3%, driven by NBFCs and trade. Industry lending rose 18.2%, while agricultural and personal loans increased 17.2% and 16.9%, respectively.

Domestic Investors Cushion Markets

Domestic institutional investors bought equities worth ₹8.54 trillion over the trailing twelve months, against foreign investor net selling of approximately ₹2.72 trillion.

Monthly systematic investment plan inflows exceeded ₹32,000 crore, reinforcing domestic savings as a source of market liquidity.

However, the report warned that abundant liquidity could encourage excessive valuations among midcap and smallcap stocks.

Corporate Margins Face Pressure

Nifty50 companies recorded 18.4% annual revenue growth in Q1FY27, but profit growth was lower at 11.8%. Nifty500 revenue increased 18.9%, while profits grew 11.1%.

The report said earnings quality and margin performance would become important through the remaining FY27 results season.

Infrastructure And Oil Shape Outlook

Infrastructure, manufacturing, industrial investment, financialisation of savings and energy transition remain structural themes. Strong order books in railways, defence, engineering and construction equipment support growth visibility.

Renewable power, transmission, hydrogen infrastructure and batteries offer investment opportunities, according to the report.

Crude oil remains the external risk. Bajaj Broking Prive considers $90–$110 a barrel manageable, but higher prices could strain inflation, the rupee and earnings.

Its H2FY27 outlook anticipates economic outperformance alongside volatility, emphasising earnings delivery, valuation discipline and sector selection.