New Delhi, Sept 20: India is on track to record real GDP growth of 6.5-7 per cent in the current fiscal, with nominal GDP growth expected at around 11-12 per cent, while corporate earnings growth could accelerate to 17 per cent next fiscal from 14 per cent, Jefferies said in its latest report.

The brokerage said India's structural growth story remains intact despite geopolitical challenges and elevated energy risks, with economic indicators showing greater resilience than expected.

According to the brokerage, the improvement in nominal GDP growth is expected to support a pickup in earnings growth from 14 per cent in the current fiscal to 17 per cent in the fiscal year beginning April 2027.

Jefferies highlighted strong bank credit growth as a key indicator of the economy's momentum. Bank credit expanded 19.1 per cent year-on-year at the end of August, while corporate lending grew 21.6 per cent in July. Loans to micro, small and medium industrial enterprises rose 24.9 per cent, supported by deposit growth of 17.8 per cent in August.

The report said the pickup in SME lending could indicate that recent GST and labour reforms, along with efforts to improve the ease of doing business, are beginning to generate benefits. The rise in corporate lending also points to a possible revival of the long-awaited private-sector capital expenditure cycle.

Domestic demand has also remained firm. GST receipts increased 14.8 per cent year-on-year in August, while power demand growth accelerated to 9.4 per cent during April-August from 1.8 per cent in January-March. Residential real estate sales across the top seven cities rose 7 per cent year-on-year in the first seven months of 2026, compared with a 1 per cent decline in 2025.

Jefferies noted that India's outlook remains exposed to developments in the Middle East, particularly through energy prices. Brent crude was around USD 106 per barrel at the time of the report, while disruptions around key oil routes were adding pressure to energy markets.

The brokerage said India has so far avoided significant energy supply disruptions by continuing to source discounted Russian crude while also increasing purchases of US energy. It expects the RBI to raise rates by 50 basis points by the end of 2026, from the current repo rate of 5.25 per cent. (ANI)