GDP growth vs corporate results

India’seconomy continuesto postheadline numbers that would make most finance ministers envious.

- 

Gross domestic product is forecast to grow7.4 percent in FY26, according to the National Institute of Public Finance and Policy. The baseline is 7.1 per cent, rising to8.8 percent ina sunnier scenario. Moody’s Ratings expects India to be one of the world’s fastest-growing bigeconomies in 2026 and 2027, at 6.4 percent and 6.5 percent, respectively. With global growth stuck at 2.5-2.6 per cent and China slowing to 4.5 per cent, India’s trajectory looks impressive.

Now turn your gaze to corporate results for the September quarter. Revenues of the Nifty 50 firms rose a mere 7 per cent. Operating profits grew 13 per cent and net profits just 9 per cent. For decades, a convenient rule held that Indian firms grew their top line 3-4 percentage points faster than GDP. That rule — borrowed from Western corporate cycles —has not merely frayed; it has collapsed.

‘The broader NSE 500 throws up much the same picture: Revenue growth of 7 per cent, and operating profit growth of 15 per cent. Only the Nifty Microcap 250 mustered double-digit sales growth (12 per cent) though even there operating profits rose only 6 per cent. Muted revenues and jumpy profits have been the norm for several quarters. How does that square with consistently high and stable GDP growth?