India Eyes Growth Surge & Stock Market Boost Post-September

By siliconindia  |  Wednesday, July 30, 2025

India Eyes Growth Surge & Stock Market Boost Post-September

·  India’s economy is expected to grow 6.7% in H2 FY26, led by rural consumption and improved macro indicators.

· Analysts project midcap stocks will outperform large-caps as domestic-driven growth kicks in.

·With inflation easing, the RBI may cut interest rates, boosting liquidity and market sentiment.

India's economic momentum is set to make a comeback in the latter part of FY 2025-26, with growth picking up from September onwards and experts feel the stock market is likely to pick up pace not long after.

Recent statistics indicate India's GDP expanded 7.4% in Q4 FY25, taking full-year growth to 6.5%, remaining the world's fastest-growing large economy. Revival of rural consumption, supported by robust monsoon rains, increasing farm incomes, and moderating inflation, is continuing to drive this upswing. Growth in personal consumption exceeded GDP, reflecting a robust domestic driver.

Economists see a bright future: JP Morgan expects GDP expansion of about 6.7% in the second part of the fiscal year, while S&P and other agencies have upgraded their FY26 estimates to 6.5%, from previous forecasts.

Also Read- India's GDP Doubles to $4.3 Trillion in a Decade: Piyush Goyal

The IMF also upgraded India's growth estimate to 6.4% for both FY26 and FY27 on the back of better global conditions.

Backing these forecasts, macroeconomic indicators are in the direction of consistent rural demand and increasing government capex. Tractor sales, FMCG volumes, and rural wages are multi-year highs, while consumer price inflation has softened enabling the Reserve Bank of India to signal future rate cuts to boost growth.

Against this background, experts anticipate India's equity markets, especially mid-cap shares, to be the disproportionate beneficiaries. Midcaps are perceived to be well-placed to generate long-term returns leveraging upside in the context of India's domestic-led growth.

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