New Delhi
Morgan Stanley believes investors are underestimating India’s growth potential, with both earnings and market peaks still ahead. The global firm has shifted its strategy to focus more on domestic sectors like financials, consumer discretionary, and industrials, moving away from energy, materials, utilities, and healthcare.
They say the global slowdown and high valuations seen in late 2024 are easing, creating opportunities for India to perform better. Strong factors like better economic stability, lower oil impact on GDP, more services exports, fiscal discipline, and lower inflation support higher market valuations and lower interest rates.
Morgan Stanley expects growth to be driven by policies like rate cuts, government spending, and GST reductions to boost consumption. They predict positive earnings, further RBI rate cuts, and policy reforms will help. A possible India-US trade deal reducing tariffs could also boost growth.
With foreign investors currently holding low positions, Morgan Stanley sees great potential for more investment inflows. Despite risks like global slowdown and geopolitical tensions, they remain confident in India’s long-term investment outlook.