Stable show

Counters reporting increase in sales and profit every quarter in FY2026 despite the uneven economic growth in these periods

- Sachin Dabhade

Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific period. As a broad measure of overall domestic production, it functions as a comprehensive scorecard of the country's economic health.

India's GDP growth hit its highest in three years, with FY 26 GDP expanding 7.7% and gross value added (GVA) at 7.9%, surpassing both FY 24 and FY 25, highlighting the economy's strengthening momentum heading into the current fiscal year. This healthy economic growth augurs well for the medium-term outlook for local equities.

Market sentiments were volatile in the last few months due to the lingering effects of the war in West Asia, massive surge in crude oil prices and worries over elevated inflation. A steep fall in the value of Indian rupee against the US dollar also weighed on the local mood. The headline Nifty 50 index has lost 7.60% in the last six months and is down around 4.70% over the year.

Some stability has emerged in the markets now amid a steep drop in crude oil prices, following the US-Iran peace deal. Investors will likely turn their attention to local economic cues. The growth rate in real GDP in FY 26 is estimated at 7.7% as compared with 7.1 % in FY 25, marking steady rebound from three-year low. Private consumption and capital formation surged to a three-year high at 7.7% and 8.2%, respectively, in FY 26. Gross fixed capital formation maintained its share at around 32% of GDP for the third straight year.

However, despite the overall impressive improvement in the GDP growth in FY 26, the quarterly performance of the economy was uneven. The fiscal year started on a tepid note with the economy clocking a growth of 6.8% - lowest in around four quarters. Sentiments improved thereafter and Q2 of FY 26 saw the GDP race higher by 8.3%.