Despite facing significant headwinds from late onset of southwest monsoon and geopolitical uncertainties caused by lingering conflict in West Asia and uncertain tariff policies, growth momentum in the April-June quarter is likely to have held up. According to The Times of India, this resilience is attributed to consumer spending, government capex, robust growth in exports, along with manufacturing and construction sectors. Economists reckon gross domestic product (GDP) likely grew 7-7.5% in Q1 FY2026-27, a tad slower than 7.8% in Q4 of 2025-26, though higher than 6.8% recorded in the corresponding quarter of the previous financial year.
In its latest monetary policy review earlier this month, RBI pegged June quarter growth at 7%, aligning closely with economist expectations. As reported by The Times of India, the National Statistical Office (NSO) is scheduled to release official GDP data for Q1 on Monday. However, economists anticipate a slight moderation in growth during subsequent quarters due to high base effect and the renewed hostilities in the Iran-US conflict, which could affect energy prices and corporate margins.
According to HDFC Bank principal economist Sakshi Gupta, the Q1 headline print is expected at 7.5% with nominal growth to cross 13%. As reported by The Times of India, manufacturing and electricity propelled industrial growth, while the pass through effect of income tax and GST rate cuts sustained consumer spending on the demand side. Quarterly earnings results showed the impact on profit margins due to higher input costs has been partly offset by higher volume sales with strong net sales in auto, consumer durables and power sectors.
Latest Q1 FY27 earnings calls reveal mixed sectoral performance with some companies reporting exceptional growth while others face margin pressures. The automotive sector showed strong volume growth of 33-46% against 10% supply headroom, with Mahindra reporting 22.8% two-wheeler production growth and Tata Motors achieving 19% EV mix in Q1. However, plastics and polymers sector faced challenges with local demand contracting 1% due to high prices, though companies maintain full-year volume growth guidance of 15%. The power sector delivered strong 8.5% demand growth in Q1, marking a sharp turnaround from 0.9% growth in FY2026, while renewable energy capacity expansion continues with companies targeting 45-51% green power mix.
