Morgan Stanley Turns Bullish on India, Sets Sensex Target at 89,000 by June 2027

Mumbai, September 5, 2026 (Yes Punjab News)

Global brokerage Morgan Stanley has turned bullish on India’s growth outlook, projecting the Sensex to reach 89,000 by June 2027 in its base-case scenario, implying an upside of around 16 per cent from current levels.

In a report titled “A Long Way Up”, Morgan Stanley’s India equity strategists Ridham Desai and Nayant Parekh said India is entering a multi-quarter growth upcycle that has not yet been fully reflected in equity valuations.

The brokerage said its 89,000 Sensex target corresponds to a trailing price-to-earnings (P/E) multiple of 23.5 times, above the index’s 25-year average of 22 times. It has assigned a 50 per cent probability to the base-case scenario.

Morgan Stanley has also outlined bull and bear scenarios for the benchmark index.

Under its bull case, which carries a 25 per cent probability, the Sensex could rise to 1,00,000, representing an upside of about 31 per cent. The scenario would be supported by crude oil prices falling below $75 a barrel and reflationary policies improving growth expectations.

For the bull case to materialise, Sensex earnings would need to compound at an annual rate of 19 per cent between FY26 and FY29.

The brokerage’s bear case, also assigned a 25 per cent probability, places the Sensex at 66,000, implying a downside of around 14 per cent.

Morgan Stanley said this scenario could emerge if crude oil prices average above $120 a barrel, prompting the Reserve Bank of India to tighten monetary policy to preserve macroeconomic stability. A sharp slowdown in global growth could further weigh on India’s domestic economy.

Under the bear case, Sensex earnings would grow at a slower annual rate of 13 per cent between FY25 and FY28.

Morgan Stanley’s base case is underpinned by further improvement in India’s macroeconomic stability, a revival in private-sector investment and a favourable gap between real economic growth and real interest rates.

The brokerage also expects steady global growth and a benign monetary policy environment in India to support equities.

It expects Sensex earnings to compound at 16 per cent annually through FY29, providing a key foundation for its positive market outlook.

Morgan Stanley believes the combination of strong earnings growth and improving domestic economic conditions could help Indian equities sustain their upward trajectory despite relatively elevated valuations.