'India To Be Best Performing Emerging Market In 2025...' Morgan Stanley Gives 18% Upside For Sensex

Investment banking company Morgan Stanley in its report titled ‘India Equity Strategy Playbook’ said that India is still the market to beat, adding that it expects India to be among the best performing emerging markets in 2025.

Why Is India Among The Best Performing Emerging Markets?

The reasons that the company cited for the same are India’s strong macro stability as a result of improving terms of trade and flexible inflation targeting as well as forecast earnings growth of about 18-20% annually over the next 4-5 years, led by an emerging private capex cycle.

Additionally, India is also going to be one of the best performing emerging markets due to the re-leveraging of its corporate balance sheets and the unfolding of a structural rise in discretionary consumption.

India is also a reliable source of domestic risk capital.

Base Case Scenario

Even in its base case scenario Morgan Stanley notes that there will be a continuation in India’s gains in macro stability along with an upside of 18% to BSE Sensex due to fiscal consolidation, increased private investment and a positive gap between real growth and real rates.

The investment banking company also cites robust domestic growth, no recession in the US and benign oil prices as part of their assumptions for the prediction of the 18% upside to BSE Sensex.

Sensex earnings compound at 17.3% annually through FY27. In its base case, Morgan Stanley’s predictions are 15% ahead of consensus to FY27.