Sensex 1,07,000 by 2026? Morgan Stanley’s Big India Upgrade, 8 Points

Mumbai

India Set for 13% Market Upside: Sensex Target Raised to 1,07,000 | Morgan Stanley’s Data-Backed Bullish Outlook | Global Bulls Back India for 2026

1. Major Market Outlook (2026 Target)

1. Sensex Forecast

   • Bull Case: 1,07,000 by Dec 2026

   • Base Case: 95,000 by Dec 2026

   • Upside: ~13% from current levels

2. Market Theme Shift

   • Transition from stock-picking to macro-driven rally

   • 2026 expected to mark India’s multi-year rebound

3. Investor Positioning

   • FII exposure at historic lows

   • Domestic inflows structurally strong, creating stable risk capital

2. Earnings & GDP Growth Driving Valuations

1. Earnings Cycle Strength

   • Sensex earnings projected to grow 17–19% CAGR until FY28

2. GDP Growth

   • India’s nominal GDP expected at 10–11% annually

3. Growth Drivers

   • Rising private capex

   • Strong bank balance sheets

   • Broad-based sectoral recovery

Table: Key Financial Growth Indicators (FY25–FY28)

3. Structural Economic Reset Strengthening Markets

1. Macro Stability Improvements

   • Lower inflation volatility

   • Lower growth volatility

   • Benefits of flexible inflation targeting

2. Oil Impact Reduced

   • Fall in oil intensity improves trade stability

3. Virtuous Cycle Formation

   • Lower real rates

   • Higher equity valuations

   • Consistent domestic flows

4. Rise of Domestic Ownership Reducing FII Dependence

1. Household Financialisation Surge

   • Higher participation through mutual funds, SIPs, EPFO

2. Policy Support

   • Retirement funds allowed to increase equity allocation

3. Global Index Weighting

   • India’s inclusion in major indices raising passive inflows

5. Policy Actions Fueling Recovery

1. Recent Supportive Measures

   • RBI rate cuts, CRR reduction

   • Liquidity infusion across banking system

   • GST tweaks, income-tax adjustments

   • Elevated public-sector capex

2. Outcome

   • Eases post-Covid macro tightening

   • Sets stage for predictable earnings growth

6. Sectoral Calls & Preferred Portfolio

1. Overweight Sectors

   • Consumer Discretionary

   • Industrials

   • Financials

2. Neutral Sectors

   • Technology, Staples, Communication Services

3. Underweight Sectors

   • Energy, Utilities, Healthcare, Materials

4. Preferred Stocks (Examples)

   • Maruti, Titan, Trent, Varun Beverages

   • Reliance Industries, ICICI Bank, Bajaj Finance

   • L&T, UltraTech Cement, Coforge

7. Key Downside Risks

1. Global Risk Triggers

   • US slowdown

   • Oil above $100/barrel

   • Trade tensions and tightening global liquidity

2. Bear Case Scenario

   • Sensex could drop to 76,000 by end-2026

3. Domestic vs Global

   • Most risks are external, while domestic fundamentals remain robust

8. Global Validation: Goldman Sachs Also Turns Bullish

1. Goldman’s Stance

   • Upgraded India to ‘Overweight’ in 2025

   • Attributes strength to stable earnings & macro improvement

2. Nifty Target

   • 29,000 by end-2026

3. Key Support

   • Record domestic inflows absorbing heavy FPI selling

Disclaimer

This article is for information and analysis purposes only. It should not be considered investment advice or a recommendation to buy or sell securities. Market projections, targets, and financial forecasts mentioned above are subject to risks, uncertainties, and market conditions. Readers should consult a certified financial advisor before making any investment decisions. The Profit India is not responsible for any financial losses arising from the use of this information.

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