Morgan Stanley Lowers Sensex Target To 82,000 For 2025; Bull-Case At 91,000, Bear-Case At 63,000 – News18
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Morgan Stanley remains overweight on financials, consumer cyclicals, and industrials, while it remains underweight on energy, materials, utilities and healthcare.
Morgan Stanley has cut its earnings estimates about 13%, and its December 2025 Sensex target is 12% lower.
Global brokerage Morgan Stanley has revised its year-end Sensex target to 82,000 by December 2025, trimming it from its earlier forecast of 93,000. This implies a 7 per cent upside from the current Sensex level of around 76,700.
“This level assumes continuation in India’s gains in macro stability via fiscal consolidation, increased private investment, and a positive gap between real growth and real rates,” said Ridham Desai, Morgan Stanley’s India strategist, in a note co-authored with Upasana Chachra, Bani Gambhir and Nayant Parekh.
The brokerage’s base case also factors in robust domestic growth, a soft US economy with no recession, benign oil prices, and an assumption that major tariff shocks are already priced in.
Bull-Case Scenario: 91,000
In a more optimistic scenario, Morgan Stanley sees the Sensex potentially rising to 91,000 by December 2025, though this is a revision from the previously forecast 1,05,000. The firm assigns a 30% probability to this scenario.
“We cut our earnings estimates about 13%, and our December 2025 Sensex target is 12% lower,” said Desai and Parekh in the report.
The brokerage also observed that the correlation between Indian equity returns and global equities is weakening and now sits below historical averages, suggesting greater insulation of Indian markets.
Monetary Policy Outlook
Morgan Stanley anticipates a 50 bps cut in short-term interest rates, alongside a positive liquidity environment as the base case for India’s monetary policy trajectory.
The report expects Sensex earnings to grow at 16% annually through FY28, underpinned by solid fundamentals and stable macroeconomic conditions.
Sector Preferences
The brokerage firm is overweight on financials, consumer cyclicals, and industrials. However, it remains underweight on energy, materials, utilities and healthcare.
“We do not anticipate a bunching of issuances and the retail bid keeps its nose ahead of the supply,” the note added.
Bear-Case Scenario: 63,000
In a downside scenario, if Brent crude rises above $100, RBI tightens rates to protect macro stability, and the US slips into recession, Morgan Stanley sees the Sensex falling to 63,000. This bear-case outcome has been assigned a 20% probability.
Under this case, earnings growth is expected to slow to 13% annually from FY25–28, especially hitting FY26, with equity valuations likely to decline as macro pressures mount.
“Oil prices (Brent) are persistently below the $70 a barrel, resulting in lower domestic inflation and prompting more rate cuts from the RBI. The global trade war is curtailed by reversals in positions on tariffs, leading to improved growth prospects,” the note said about its base assumptions.
