1 / 15Brokerage firm Morgan Stanley’s bull case scenario expects the BSE Sensex index to hit levels of 1,05,000 by the end of this year itself. The brokerage has assigned a 30% probability for this scenario to play out.
2 / 15For the bull case, Morgan Stanley expects oil prices to remain persistently below $70 per barrel, resulting in lower domestic inflation, which prompts the RBI to cut interest rates further, an improved energy balance to contribute to the gains. The government reforms too, surprise on the upside with a slew of GST rate cuts and some progress on farm laws. The bull case projects Sensex earnings to compound at a rate of 20% annually over financial year 2024-2027.
3 / 15For the base case, for which Morgan Stanley has assigned a 50% probability, it has a Sensex target of 93,000. For this, Morgan Stanley expects a modest reduction in interest rates, a positive liquidity environment and Sensex earnings to compound at 17% annually through financial year 2027.
4 / 15The bear case scenario sees Morgan Stanley projecting a Sensex target of 70,000 and it has assigned a 20% probability for this scenario to play out. The bear case expects oil prices to cross $110 per barrel, which results in the RBI tightening rates to protect macro stability. It also showcases global growth slowing meaningfully and the US slipping into a recession. Here, the Sensex earnings are projected to compound at 15% annually till financial year 2026 and equity multiples to derate to project the poor macros.
5 / 15Based on this, Morgan Stanley is “Overweight” on sectors like financials, consumer discretionary, industrials and technology stocks. It is “Underweight” on consumer staples, energy, healthcare, utilities and materials. The brokerage has 10 stocks as part of its focus list, here is a look at those:
6 / 15Brainbees Solutions | The newly listed stock has an “Overweight” rating from Morgan Stanley with a price target of ₹818, implying a potential upside of 29% from current levels. All five analysts who track the stock have a “buy” rating on it.
7 / 15Maruti Suzuki | The “Overweight” rating on India’s largest passenger car manufacturer has a price target of ₹14,124 on the stock, implying a potential upside of 19% from current levels.
8 / 15Trent | The newest Nifty entrant, after returns of over 100% in 2024, still have the potential for another 11% upside, according to Morgan Stanley, who has a price target of ₹8,032 on the stock.
9 / 15Reliance Industries shares were staging a bit of a comeback from the recent lows, having corrected over 20% from its peak. It is now witnessing some selling pressure at higher levels, also contributing 22 points to the fall on the Nifty.
10 / 15ICICI Bank | Morgan Stanley’s price target on ICICI Bank at ₹1,650, is the highest for the private lender on the street. This also implies a potential upside of over 30% from current levels.
11 / 15SBI Life | A stock with one of the highest potential upside in Morgan Stanley’s focus list, SBI Life shares may rise up to ₹2,240, according to Morgan Stanley, which implies a potential upside of 52% from current levels.
12 / 15Hindustan Aeronautics | The PSU defence company also has an “Overweight” rating from Morgan Stanley, with a price target of ₹5,292. This implies a potential upside of 27% from current levels.
13 / 15L&T | The brokerage has a price target of 3,875 on the stock, which implies a potential upside of close to 5% from current levels.
14 / 15Infosys | Morgan Stanley expects the IT services giant to see a 10% upside on the stock with a price target of ₹2,150.
15 / 15UltraTech Cement | Morgan Stanley’s price target of ₹13,620 on India’s largest Cement company is the second-highest on the street for the Aditya Birla Group company. This implies a potential upside of 15% from current levels.
