Morgan Stanley's India strategy report anticipates a 14% upside in the Sensex by Dec 2025

Sensex to Cross 1 Lakh by 2025? Morgan Stanley's Bull vs Bear Case for the Stock Market

As 2025 unfolds, stock market investors could see significant gains, according to Morgan Stanley. In its India strategy report, the brokerage has presented both a bull and bear case for the market, predicting that the BSE Sensex could see a remarkable rise.

After reaching new heights in 2024, India’s domestic indices, including Sensex and Nifty, are expected to continue their bullish momentum this year. Morgan Stanley anticipates a 14% upside in the Sensex by December 2025, with the base case target set at 93,000.

India’s strong earnings, macroeconomic stability, and robust domestic flows form the backbone of Morgan Stanley's optimistic outlook. The brokerage stressed that, despite global risks, India remains a market to beat, making it a top pick in emerging markets and the Asia-Pacific region. With steady government policies supporting growth, India could stand out as one of the best-performing emerging markets in 2025.

Morgan Stanley foresees a stock-pickers' market in 2025, emphasizing a preference for cyclicals over defensives and small- and mid-cap stocks (SMIDs) over large-cap companies. The bull case target for the Sensex is set at 105,000, while the bear case target is 70,000. Most risks to this forecast are seen as stemming from external factors rather than from within India.

In terms of stock picks for 2025, Morgan Stanley is bullish on sectors like financials, consumer discretionary, industrials, and technology. It has given an "overweight" rating to companies including Brainbees Solutions (FirstCry), Maruti Suzuki, Trent, Reliance Industries, ICICI Bank, SBI Life Insurance, Hindustan Aeronautics, Larsen & Toubro, Infosys, and UltraTech Cement.

While challenges such as global growth risks and an influx of IPOs could pose short-term concerns, the long-term prospects for India remain strong.