Morgan Stanley projects Sensex to reach 89,000 by June 2027

Morgan Stanley has issued a bullish outlook for India, projecting the Sensex to reach 89,000 by June 2027 in its base-case scenario. This target represents an approximate 16 per cent upside from current levels and assumes a trailing price-to-earnings multiple of 23.5 times.

In a report titled “A Long Way Up”, strategists Ridham Desai and Nayant Parekh suggest India is entering a multi-quarter growth upcycle that is not yet fully reflected in equity valuations. The brokerage assigned a 50 per cent probability to this base case, which relies on improved macroeconomic stability, a revival in private-sector investment, and a favorable gap between real economic growth and real interest rates.

The brokerage also provided alternative scenarios:

- Bull Case (25 per cent probability): The Sensex could rise to 1,00,000, driven by crude oil prices falling below $75 a barrel and reflationary policies. This would require annual earnings compounding at 19 per cent between FY26 and FY29.

- Bear Case (25 per cent probability): The Sensex could drop to 66,000 if crude oil prices exceed $120 a barrel, potentially forcing the Reserve Bank of India to tighten monetary policy amid a global growth slowdown.