Morgan Stanley expects the benchmark Sensex top the 50,000 milestone by the end of next year.
The brokerage believes the economic growth cycle is not fully priced in. It has revised upwards the earnings per share (EPS) estimate for Sensex.
Earlier, the brokerage had a target of 37,300 for June 2021.
At 50,000, the Sensex would trade at 16 times its estimated FY21 earnings -- which the brokerage projects will be 15 per cent higher than FY20.
“We remain in a bull market that started in March, and even though one should expect corrections along the way, the equity market may have more legs before it tops out. We raise EPS estimates and index target,” said Morgan Stanley equity strategist Ridham Desai and Sheela Rathi in a note.
The brokerage believes a ‘bottom-up’ approach will be more rewarding for investors.
