Morgan Stanley has set a goal of 74,000 for the
benchmark Sensex to be finished by December 2024.
This implies an upside of 12 per cent from the present
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 or RBI.
It also has a ‘bear case’ target of 51,000, with risks
such as elections delivering an unclear mandate with a change in the 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.
Agency
