Global investment firm Morgan Stanley projects that India’s benchmark BSE Sensex could rise to 89,000 by June 2026, indicating a potential upside of around 12% from current levels. This optimism is based on expectations of fiscal consolidation, stronger private investment, and sustainably low real interest rates. Despite flat returns from the Sensex and Nifty this year, Morgan Stanley believes investors are undervaluing India’s growth prospects. It highlights key structural strengths such as favourable demographics, rising exports, fiscal discipline, and growing household investments in equities.
In its base case scenario (50% probability), the Sensex is forecast to reach 89,000, reflecting 23.5x earnings, slightly above the historical average. The bull case (30% probability) sees the index touching 1,00,000, assuming lower oil prices, further GST reform, and reduced global trade tensions. In the bear case (20% probability), it could drop to 70,000 if oil exceeds $100/barrel, the U.S. enters a recession, and the RBI tightens policy.
Morgan Stanley expects Sensex earnings to grow at 16.8% annually through FY2028 and suggests overweighting financials, consumer discretionary, and industrials, while remaining underweight on energy, utilities, materials, and healthcare.