SBI Projects 7.8% Real GDP Growth for India in Q2 FY 2026-27

The news

The State Bank of India (SBI) has projected that India's real gross domestic product (GDP) will grow at 7.8% in the second quarter of the financial year 2026-27, higher than the Reserve Bank of India's (RBI) estimate of 7.2%. The forecast, published in an SBI research report on November 12, 2026, is based on an analysis of 54 leading economic indicators across agriculture, industry and services. The report said 88% of major economic activities showed improvement during the quarter.

SBI also projected gross value added (GVA) growth at 8–8.2% and nominal GDP growth at 11–11.5% for the same period. The report noted that in September, commercial vehicle sales rose 35.7%, cement output increased 29.5% and non-oil exports grew 21.5%. However, passenger vehicle sales, tractor sales and mining activity declined, and airport passenger numbers fell 5.8%. Among about 2,300 listed companies outside banking, financial services and insurance, sales rose 25% year-on-year, operating profit grew 35% and net profit increased 33%. Operating margin improved from 14.8% to 16.8%.

Bank credit growth remained strong, with total loans rising 18.2% year-on-year and deposits growing 16.7% as of October 15. Banks extended an additional ₹10.6 lakh crore in credit in the second quarter, compared with ₹5.9 lakh crore in the same quarter of FY 2024-25. Industry and personal loans accounted for about half of new credit, and public sector bank profits rose by up to 20% year-on-year. The report flagged risks from El Niño and weather patterns, estimating a potential loss of 3.86 crore tonnes of agricultural production valued at approximately ₹1 lakh crore, with kharif crops losing 89 lakh tonnes and rabi crops 2.97 crore tonnes. Some manufacturing sectors, including electrical equipment, computers, electronics, furniture and fabricated metal products, face difficulty passing higher input costs to customers, though export growth has supported earnings.

How does SBI's estimate compare with the RBI's?

SBI's real GDP growth forecast of 7.8% for Q2 FY 2026-27 is 0.6 percentage points higher than the RBI's estimate of 7.2%. The RBI's comparable estimate is a projection of economic performance, not a released outcome. SBI's analysis draws on 54 indicators covering agriculture, industry and services, while the RBI uses a broader set of macroeconomic models. The difference reflects SBI's assessment of stronger demand and activity in sectors such as commercial vehicles, cement and non-oil exports.

What are the key risks to the growth outlook?

The SBI report identified two main risks. First, El Niño and below-normal rainfall could damage kharif and rabi crops, with an estimated loss of 3.86 crore tonnes of agricultural output valued at about ₹1 lakh crore. Districts in Madhya Pradesh, Uttar Pradesh and West Bengal face greater rabi risk, while parts of Rajasthan, Punjab, Uttar Pradesh and Maharashtra are more exposed for kharif crops. Second, some manufacturers in sectors such as electrical equipment, computers, electronics, furniture and fabricated metal products are finding it difficult to pass higher input and production costs to customers, which could squeeze margins. Export growth has partly offset this pressure.

What do the corporate and credit data indicate?

Corporate performance improved in the second quarter. Among about 2,300 listed companies outside banking, financial services and insurance, sales rose 25% year-on-year, operating profit grew 35% and net profit increased 33%. The operating margin expanded from 14.8% to 16.8%. Bank credit growth accelerated to 18.2% year-on-year as of October 15, with banks disbursing ₹10.6 lakh crore in new loans in the quarter, nearly double the ₹5.9 lakh crore in the same period of FY 2024-25. Industry and personal loans together accounted for about half of new credit. Public sector bank profits rose by up to 20% year-on-year, reflecting improved asset quality and higher lending.