SBI Research sees Q2 GDP growth at 7.8%, above RBI's 7.2% estimate

India's economy is expected to grow at 7.8% in the July-September quarter of the current fiscal, higher than the Reserve Bank of India's projection of 7.2%, according to an SBI Research report.

The report estimated that gross value added (GVA) growth could range between 8% and 8.2% in the second quarter of 2026-27.

It also projected nominal GDP growth at 11-11.5% during the quarter.

"Despite challenges emanating from global front, India is expected to deliver robust growth in one more quarter at 7.8% as all leading indicators point out to the same," SBI Research said in its report released on Wednesday.

The report said 88% of the 50 leading indicators tracked by it showed acceleration in the second quarter of FY27, compared with 78% in the year-ago period.

Strong momentum in construction materials, commercial vehicles, non-oil exports and port cargo supported the growth outlook, it said.

Cement output growth accelerated to 29.5% in September from 9.8% in June, while commercial vehicle sales growth rose to 35.7% from 24% during the same period.

Non-oil exports grew 21.5% in September, compared with 16.5% in June.

“Weaker mining, tractor, and passenger indicators could have offset an even further acceleration” the report said.

SBI Research estimated services sector growth at 9.7% in Q2 FY27, compared with 10% in the preceding quarter.

Industry growth was projected at 7.5%, while agriculture, forestry and fishing growth was estimated at 2.8%.

Within industry, manufacturing growth was pegged at 8.7%.

“Our estimates suggest that although there will be some moderation in the real GDP in agriculture, nominal is poised to remain on the higher side as Agricultural output price inflation accelerated to 8.5% in September 2026, compared with 7.3% in August and 4.8% in May 2026,” the report said.

It also flagged pressure on manufacturing companies, saying input prices continued to remain higher than output prices across several sectors, indicating incomplete pass-through of higher costs to consumers.

“The gap remains particularly pronounced in electrical equipment (3.76%), computer, electronic and optical products (1.60%), furniture (1.28%) and fabricated metal products (1.01%),” it added.

The National Statistical Office is scheduled to release the official GDP estimates for the July-September quarter later this month.