Ashwini Shami Forecasts Continued GDP Growth in 7-8% Range Post-Conflict Disruptions
Economic Growth Momentum Expected to Continue in India
Ashwini Shami, President and Chief Portfolio Manager at OmniScience Capital, believes that India's GDP growth momentum will continue in the 7-8 percent range once war-related disruptions subside. In an interview to Moneycontrol, Shami pointed out that strong bank loan growth of 15-16 percent in April 2026 and sustained high PMI readings indicate a robust expansionary trend in the economy.
Banking and Financial Services Attractively Priced
Shami finds banks and financial services companies, such as housing finance firms and infrastructure NBFCs, to be attractively priced at present. Power, utilities, EPC, and select industrials also have good growth visibility and are attractively valued. This is due to the strong growth outlook for these sectors, which is expected to continue in the coming years.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
Market Volatility Expected to Continue
Despite the positive outlook, the market is expected to remain volatile in the short term. The recent market fall of 2.0 percent can largely be attributed to the IT index, which declined by 9.8 percent. This was triggered by the earnings releases of the sector's largest companies, which failed to provide visibility on sustainable future growth.
US-Iran Conflict Impacting Global Economy
The ongoing US-Iran conflict is now visible on the US economy, with inflation accelerating to its highest rate in nearly two years. As a result, the Federal Reserve is unlikely to cut interest rates anytime soon and is now expected to push any rate cuts toward the end of 2026. This has reduced the probability of an interest rate cut, which could further impact the Indian market.
Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline
| Sector | Growth Rate (Q4 FY26) | Growth Rate (Q3 FY26) | Growth Rate (Q2 FY26) |
|---|---|---|---|
| IT | -9.8% | 2.5% | 6.3% |
| Banks and Financial Services | 15-16% | 12-13% | 10-11% |
| Power and Utilities | 10-11% | 8-9% | 6-7% |
Growth Outlook for India
Despite global headwinds, India is expected to continue growing in the 7-8 percent range once war-related disruptions subside. The growth estimate for FY27 by the MPC takes into account global headwinds and supply chain disruptions and could see an upward revision as conditions stabilize.
Investor Takeaway
Investors may consider attractively priced banks and financial services companies for potential growth.
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