Synopsis: Morgan Stanley estimates that the SENSEX will gain over 26 percent to hit the 1,07,000 mark as part of its bull case. This uptick is followed by favourable government policies, strong consumer demand, cyclical recovery, etc.
SENSEX is currently trading at 84,765.70. It made a low of 84,558.36, down by 0.46 percent or 392.59 points from its previous closing trading session at 84,950.95. Over the past five years, SENSEX has delivered a return of 93 percent, which is lower than NIFTY 50’s return of 102 percent during the same period.
Analyst Comments
Morgan Stanley predicts the Sensex to rise by 13 percent, and the index to hit 95,000 by December 2026, thus giving a 50 percent probability for this base case to materialize.
In the view of the brokerage, 2026 would mark the year of market transition from stock picking to a more macro-driven market. The bull case target of the portfolio is 1,07,000 (26 percent upside), as per the brokerage, supported by a combination of strong policy and cyclical recovery, while the bearish scenario target of 76,000 is mainly due to global risks rather than domestic weaknesses.
The company mentions that its Sensex target comes with a trailing P/E of 23.5x, which is a bit higher than the 25-year average of 22x, and considers that India’s stabilizing economy warrants that premium. Morgan Stanley also emphasized that India’s long-term growth story is getting stronger as a result of government policies, robust demand, and overall economic momentum.
Regarding sectors, the brokerage has Consumer Discretionary and Industrials in its overweight basket, each by 300 bps, betting on the revival of urban demand and the continuation of capex trends to drive growth. Also, Financials has an overweight position of 200 bps brought about by credit growth with a good health condition.
On the other hand, the global brokerage is equally weighted on Communication Services, Consumer Staples, and Technology, and underweights Utilities, Energy, Healthcare, and Materials, citing limited earnings visibility.
Written by Satyajeet Mukherjee
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