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In a bullish scenario, which the firm assigns a 30% probability, Morgan Stanley believes the Sensex could even hit 1,00,000
Sensex At 1 Lakh Soon?
Sensex Target For 1 Year: Global brokerage Morgan Stanley has revised its Sensex target upward to 89,000 by June 2026 in its base case scenario, forecasting an 8% upside from current levels. The revised estimate factors in updated earnings projections and a roll forward from its previous December 2025 target of 82,000.
In a bullish scenario, which the firm assigns a 30% probability, Morgan Stanley believes the Sensex could even hit 1,00,000, driven by a combination of favorable domestic reforms and supportive global conditions.
The firm’s new base case target assumes a trailing P/E multiple of 23.5x, which is above the 25-year average of 21x. This premium, according to Morgan Stanley’s equity strategist Ridham Desai, reflects higher confidence in India’s medium-term growth outlook, a stable and predictable policy environment, a lower market beta, and a strong terminal growth rate.
“In our base case, we also assume a benign IndiaUS trade deal. We use another 50bps reduction in short-term interest rates and a positive liquidity environment as the base case for monetary policy. We do not anticipate a bunching of issuances, and the retail bid keeps its nose ahead of the supply. Sensex earnings compound at 16.8% annually through F2028,” it said.
The brokerage has modeled a 50% probability for this scenario, assuming robust domestic growth, no US recession despite slow growth, and stable oil prices. It also expects easing interest rates, continued retail investor participation, and strong earnings momentum—with Sensex earnings expected to grow at a CAGR of 16.8% through FY28.
“Despite all the events of the past two months, Indian stocks remained orderly even when they declined with limited increase in implied volumes. Persistent retail buying underpins its structural nature. Foreign portfolios positioning is the weakest since we have had the data in 2000 and there are signs that their view on India is shifting,” Desai said.
In the bull case, where the Sensex could hit 1 lakh within the next 12 months, the report highlights key drivers such as persistently low oil prices (below $65 per barrel), GST rate cuts, reforms in agriculture, and earnings growth at a CAGR of 19%. Relief from global trade tensions would also be a major catalyst.
Despite recent global and domestic market uncertainties, Morgan Stanley notes that Indian stocks have shown remarkable resilience, with retail buying providing consistent support. Foreign investor positioning, it said, is at its weakest since 2000, but early signs indicate a potential shift in their outlook toward India.
On the investment strategy front, Morgan Stanley is overweight on financials, consumer discretionary, and industrials, and underweight on energy, materials, utilities, and healthcare. Desai emphasized that the current market is transitioning into a stock-picker’s environment, moving away from the top-down or macro-driven trends that dominated post-Covid investing.
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