New Delhi: Global brokerage firm Morgan Stanley has reiterated that BSE Sensex would hit the 1-lakh mark by June 2026 in a bull case scenario. It may be noted that the global brokerage firm’s bold prediction comes at a time when foreign investors have seen pulling out money from the Indian stock market.
The foreign portfolio investors have resorted to relentless selling and their positioning has dropped down to the levels since data began in 2000.
“The equity market may be underestimating the likely turn in the growth cycle. The earnings and market peak are ahead of us,” ET quoted Morgan Stanley’s equity strategist Ridham Desai as saying.
“There is a strong case for re-rating. India is likely to gain share in global output in the coming decades, driven by strong foundational factors, including robust population growth, a functioning democracy, macro-stability-influenced policy, better infrastructure, a rising entrepreneurial class, and improving social outcomes,” Desai added.
1 Lakh Sensex Target: Risks and Challenges
Morgan Stanley has set the Sensex base case target of 89,000 by June 2026 if there is a 12% gain. It suggested that the index would trade at a trailing P/E multiple of 23.5x, above the 25-year average of 21x.
Morgan Stanley has said that its prediction of a bull-case scenario can be a possibility if oil prices are continuously below US$65, GST reforms and lower interest rates. It also stated that the tariff related issues needed to be sorted at global level which would improve growth prospects and the earnings growth compound at 19% annually over FY2025-28 then the Sensex can touch the 1-lakh mark.
The brokerage firm official expressed confidence in India’s growth story, the country has the potential to become the most sought-after consumer market, witness credit to GDP rise, and manufacturing gain share in GDP.
“The falling intensity of oil in GDP and rising share of exports, especially services, along with fiscal consolidation (with a likely primary surplus in three years), imply a lower savings imbalance. This will allow structurally lower real rates,” ET quoted Desai.
Desai added that Morgan Stanley’s prediction is based on India achieving the holy grail of investing: “High growth with low volatility, falling interest rates, and low beta = higher P/E,” he said.
“Lower inflation volatility, resulting from both supply-side and policy changes (flexible inflation targeting), means that volatility in interest rates and growth rates is likely to fall in the coming years,” he further stated.
(Disclaimer: This article is only meant to provide information. News9 does not recommend buying or selling shares or subscriptions of any IPO, Mutual Funds and crypto assets.)