Morgan Stanley has set a December 2024 target of 74,000 for the benchmark Sensex. This implies an upside of 12 per cent from the current level. “This level suggests that the BSE Sensex will trade at a trailing P/E multiple of 24.7x, ahead of the 25-year average of 20x. The premium over the historical average reflects greater confidence in the medium-term growth cycle in India,” the brokerage said in its ‘2024 India Equity Strategy Outlook’ note. Morgan Stanley has a ‘bull case’ target of 86,000, which is contingent on a dip in oil prices to $70 a barrel and deep rate cuts from the Reserve Bank of India (RBI). It also has a ‘bear case’ target of 51,000, with risks such as elections delivering an unclear mandate with a change in government, oil prices surging past $110/barrel, the RBI tightening to protect macro stability and a US recession leads global growth lower.
“With strong earnings, macro stability and domestic flows, it is hard to argue against India’s investment case. That said, an event-heavy calendar with potential binary outcomes sets the market up for volatility, after having been less volatile than ever,” strategists Ridham Desai, Sheela Rathi and Nayant Parekh wrote in a note.
First Published: Nov 17 2023 | 12:01 AM IST