India`s Growth Outlook Remains Strong Despite High Market Volatility: Bajaj Broking Prive
India’s growth cycle remains domestic, investment-led and structurally resilient, with strong domestic demand, infrastructure spending and sustained domestic investor participation providing support to the economy, according to the latest Monthly Outlook – The Twenty Things That Matter by Bajaj Broking Prive.
According to the report, India’s real GDP grew 7.8% in Q1FY27, while Gross Fixed Capital Formation (GFCF) increased 11.9%, significantly outpacing overall GDP growth. This indicates that the current growth cycle is increasingly being supported by productive investment. Government spending on transport infrastructure, railways, logistics, defence manufacturing and urban development has also helped strengthen the investment cycle.
The investment momentum is further reflected in the 34.3% investment share of GDP in Q1FY27, compared with 31.4% a year earlier. Central government capital expenditure increased by approximately 24% YoY in Q1FY27, with investment activity broadening across transport and power infrastructure, metals, data centres and manufacturing.
Credit growth remains strong, supporting the broader economic expansion
India’s overall credit growth for scheduled commercial banks expanded by 18.13% YoY for the fortnight ending 15 September 2026, while deposits grew 17.31% YoY. Bank credit outstanding stood at Rs223.29 trillion, while aggregate deposits outstanding stood at Rs276.23 trillion as of 15 September 2026. On a monthly basis, services sector credit grew the fastest at 24.3% YoY in August 2026, driven by NBFCs and trade, while industry credit grew 18.2% YoY, supported by infrastructure and manufacturing demand. Agri and personal loans also recorded robust growth of 17.2% and 16.9% YoY, respectively.
Domestic investors strengthen market resilience
One of the key structural shifts highlighted by Bajaj Broking Prive is the growing role of domestic investors in supporting Indian markets. While FIIs/FPIs remained net sellers of approximately ?2.72 trillion over the trailing twelve months, DIIs recorded net purchases of ?8.54 trillion.
The report notes that domestic savings are increasingly becoming an important source of market liquidity, reducing dependence on foreign capital and strengthening the ability of Indian markets to absorb external shocks.
Retail participation has also continued to strengthen, with SIP inflows above ?32,000 crore per month. However, the report cautions that strong domestic liquidity has also increased the risk of valuation excesses, particularly in the mid-cap and small-cap segments.
Margins emerge as the key earnings battleground
Corporate India recorded healthy revenue growth during Q1FY27, with Nifty50 revenue growth at 18.4% YoY and Nifty500 revenue growth at 18.9% YoY. However, profit growth was lower at 11.8% and 11.1%, respectively.
Bajaj Broking Prive highlights that margin pressure has become an important focus area, with the remaining FY27 earnings season likely to be increasingly driven by earnings quality rather than revenue growth alone.
Infrastructure, manufacturing and energy transition remain key themes
The report identifies infrastructure, manufacturing, industrial capex, financialisation of savings and energy transition as key structural themes for investors.
Strong order books across railways, defence, construction equipment, engineering services and industrial manufacturing continue to provide growth visibility. The report also highlights the growing investment opportunity across renewable power, transmission networks, hydrogen infrastructure, battery manufacturing and other energy-transition segments.
Crude oil remains the biggest external risk
While domestic fundamentals remain supportive, crude oil price volatility remains the most significant external macroeconomic risk for India. Bajaj Broking Prive considers a crude oil range of $90-$110 per barrel manageable, but notes that prices above $110 could put pressure on the current account deficit, the rupee, inflation and corporate earnings.
Outlook for H2FY27
Bajaj Broking Prive’s base case remains one of continued economic outperformance accompanied by elevated market volatility, rather than a meaningful deterioration in underlying fundamentals.
The report emphasises the importance of earnings delivery, valuation discipline and sector selection, while maintaining a focus on India’s long-term structural themes.
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