Ridham Desai, Equity Strategist at Morgan Stanley, believes Sensex could hit 75,000 levels by year-end given a few things go right for the market. This means a potential upside of 37 per cent from the last close.
The conditions he states for this to happen, which he believes has a 30 per cent probability, are:
- Inclusion of India in global bond indices, resulting in near $20 billion inflows over 12 months
- COVID-19 does not resurge,
- Oil retraces it ..
- RBI remains dovish for longer, and
- Earnings growth compounds 25% annually over F2022-24
In the base case, for which he sees a 50 per cent probability, he believes Sensex will hit the 62,000 level by year-end, meaning a potential upside of 16 per cent by December 2022. Though this target is 11 per cent lower than its previous target.
Despite near term margin pressure due to rising raw material costs, Morgan Stanley analysts believe the new profit cycle is intact, and they expect earnings to compound at 22 per cent annually (24 per cent previously) over the coming two years.
Happy Investing!
R♥Vi
Fund Wallet is a AMFI registered Distributor of Mutual funds. This is not a buy / sell recommendation. Source ET
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