India’s nominal GDP grew 8.9 per cent in FY26, a moderation from the 9.7 per cent growth achieved in FY25. At current prices, GDP rose 9.1 per cent in 4QFY26 vs. 9.2 per cent in 3QFY26. According to a report by Motilal Oswal, the slight sequential moderation was due to a sharp slowdown in manufacturing activity and softer external demand, partly offset by continued strength in services, improving agricultural growth, and accelerating investment spending.
Notably, PSUs recorded the sharpest increase in the corporate profit-to-GDP ratio since the lows of 2020, fueled by a broad-based earnings recovery, particularly among PSUs Banks, Insurance, and Oil & Gas sectors.
The ratio surged more than threefold to reach 1.8 per cent in 2026 from 0.5 per cent in 2020. In comparison, Private and MNC companies within the Nifty-500 universe also recorded notable gains, with their ratios surging 2.5x to 3.2 per cent and 1.4x to 0.24 per cent in 2026 (from 1.3 per cent and 0.18 per cent in 2020), respectively.
The Indian PSUs have made a successful comeback fueled by a sharp 6.2x jump in profits, reaching Rs 6.3 t from Rs 1 t during FY20-26. More than 36 per cent of these incremental profits originated from PSU banks alone.
PSU corporate’s profit-to-GDP ratio
PSU corporate’s profit-to-GDP ratio decreased to 0.5 per cent in 2020 from 2.2 per cent in 2008, given the significant value migration from public to private sectors such as Banking, Telecom, and Airlines. This occurred even as PSU-heavy sectors, such as Oil & Gas and Utilities, underperformed in terms of profit growth compared to the underlying GDP growth. However, the sectors recovered to 1.8 per cent in 2026.
The private corporate sector’s profit-to-GDP ratio improved to 2.8 per cent in 2008 from a meager 0.8 per cent in 2003. However, the ratio contracted to 1.3 per cent in 2020 before rebounding to an all-time high of 3.2 per cent in 2026. The corporate profit of Nifty-500 companies jumped 4.6x in the past six years.
On an ownership basis, the corporate profit-to-GDP ratio for Private companies within the Nifty-500 reached an all-time high of 3.2 per cent in FY26, up from 3.0 per cent in FY25. The ratio for PSUs also increased to 1.8 per cent in FY26 from 1.7 per cent in FY25. For MNCs, notably, the ratio stood at a new high of 0.24 per cent in FY26 (0.23 per cent in FY25).
