Sensex could reach 1,00,000 mark by June 2027: Morgan Stanley
The recent slowdown in Indian equity values is cyclical rather than structural, indicating that India's long-term investment case remains strong
The Sensex would hit the 1,00,000 mark by June 2027 in its bull-case scenario, according to global brokerage firm Morgan Stanley; however, it assigns a 25 percent chance to this outcome.
According to Stanley's report, the recent slowdown in Indian equity values is cyclical rather than structural, indicating that India's long-term investment case remains strong.
In its base-case scenario, it predicts the BSE Sensex will reach 89,000 by June 2027, representing an increase of about 15 percent from the July 2 closing level of 77,502. On the downside, though, its bear-case target is 66,000.
The slow Indian equities market will be revitalized by a few variables, such as increased economic development, a resurgence of private capital spending, robust domestic liquidity, encouraging government policies, and rising corporate profits.
Stronger-than-expected corporate results, a rebound in private investment, modifications aiming at attracting foreign portfolio investors (FPIs), and sustained good domestic institutional inflows might all contribute to additional gains in Indian shares, according to the brokerage firm.
Additionally, the brokerage company predicts that during the next five years, India's investment-to-GDP ratio will increase to 37.5 percent, which might facilitate long-term economic growth.
In terms of earnings, Morgan Stanley projects that, in its base-case scenario, the Sensex companies will generate earnings at a compound annual growth rate (CAGR) of 16 percent between FY26 and FY29. At the same time, broader market earnings are expected to increase by 10 percent in FY26, 15 percent in FY27, and 22 percent in FY28.
In the bull-case scenario, earnings are predicted to increase at a 19 percent CAGR from FY26 to FY29 due to lower crude oil prices and faster global economic expansion.
Furthermore, Morgan Stanley still favors industries with higher earnings potential, such as financials, consumer discretionary, and industrials.
On the other hand, it continues to be underweight in terms of energy, materials, utilities, and healthcare. Despite worries about labor disruption, the brokerage firm takes a neutral position on the technology sector, stating that artificial intelligence could open up new prospects for Indian IT services firms.
