Sensex target set at 93,000 by December 2025, says Morgan Stanley – CNBC TV18

Morgan Stanley has set an ambitious target for India’s benchmark Sensex, projecting it to reach 93,000 by December 2025, driven by a combination of structural and cyclical factors. Jonathan Garner, Chief Asia & EM Equity Strategist at Morgan Stanley is optimistic about India’s economic trajectory, emphasising that the nation remains one of the firm’s top investment destinations globally.

“We remain constructive on India. We are overweight. We believe we are in a secular bull market,” said Garner. He believes that the Indian economy experienced a cyclical slowdown recently, but pointed to factors behind this deceleration, such as heavy rainfall in August, changes in the lunar calendar, and election-related uncertainties.

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Morgan Stanley anticipates a significant pickup in growth in the first half of 2024, coinciding with the second half of India’s financial year. “We are above consensus on earnings growth,” Garner said, adding that the firm expects earnings to rebound strongly, supporting its bullish outlook for the Sensex.

While a softening US interest rate environment could provide some tailwinds, Garner emphasised that government fiscal spending will play a pivotal role in India’s economic recovery. The underlying consumer and industrial investment cycles are also seen as intact, contrasting sharply with China, which Morgan Stanley views as grappling with structural deflation.

“This slowdown appears to be a two-quarter cyclical issue, not something more prolonged or severe,” Garner said.

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Globally, Morgan Stanley has identified the US, Japan, and India as its top three preferred markets, while being cautious on Europe, broader emerging markets, and specific countries like China and South Korea.

In India, the firm is particularly optimistic about sectors such as financials, consumer discretionary, industrials, and IT services, which are well-positioned to benefit from AI adoption globally. Garner highlighted that India’s IT companies are deeply engaged in implementing AI solutions for major global clients. Conversely, Morgan Stanley remains underweight in the defensive, energy, and healthcare sectors.

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