Latest news with #IndiaEquityStrategyPlaybook
India Gazette
3 days ago
- Business
- India Gazette
Indian equities poised for long-term growth
New Delhi [India], June 5 (ANI): The recent report by Morgan Stanley, named 'India Equity Strategy Playbook', reveals that Indian equities appear undervalued, presenting a compelling opportunity for long-term to the report, 'it will require patience, given the potential for bad news from outside India, but we believe rewards will come in time.'The Equity market of India has shown resilience since September 2024, digesting a lot of unprecedented amount of bad news, which includes overvaluations in small and mid-cap stocks (SMIDs), a broad market correction, US tariff volatility, and geopolitical events. Despite these hurdles, large-cap indexes remain within 5 per cent of all-time the report also points out various strong fundamental factors supporting India's positive outlook. The country exhibits strong macro stability, characterised by improving terms of trade, a declining primary deficit, and low inflation volatility. Additionally, Morgan Stanley sees mid-to-high teens earnings growth is projected annually over the next three to five years, fuelled by an emerging private capital expenditure cycle, deleveraging of corporate balance sheets, and a structural increase in discretionary geopolitical developments have instilled a new doctrine on terror, potentially deterring future attacks and empowering decisive government action. Furthermore, an unexpected upside in military performance highlights advancements in strategy and combat capabilities, the report said. The report adds that India will outperform other emerging markets in the coming months: 'India's real policy rate relative to the US is turning up in the coming months and could support India's relative outperformance to EM in the coming months.'While the outlook is largely positive, the report also identifies several risks and catalysts. India-specific catalysts include potential dovish actions from the RBI, stimulus through GST rate cuts, a trade deal with the US, and positive incoming growth data. Globally, US policy and growth rates will be crucial cues, alongside China's deflationary impulses and broader geopolitical risks. Given India's low beta, it is expected to outperform in a global bear market but underperform in a bull Morgan Stanley recommends a portfolio strategy favouring Domestic Cyclicals over Defensives and External-facing sectors. (ANI)
Time of India
3 days ago
- Business
- Time of India
Indian equities hold promise: 'Rewards will come, require patience'; see what Morgan Stanley has to say
Indian equities are trading at undervalued levels and offer a promising opportunity for patient, long-term investors, Morgan Stanley said in its latest report 'India Equity Strategy Playbook. Tired of too many ads? go ad free now ' It highlighted that the stock market has continued to be resilient since September 2024, despite global headwinds. Investors have faced a series of challenges, including overvaluations in small and mid-cap stocks, a broad market correction, volatility from US tariffs, and ongoing geopolitical tensions. Yet, India's large-cap indices remained within 5% of record highs. "It will require patience, given the potential for bad news from outside India, but we believe rewards will come in time," the report said, signalling cautious optimism. It attributed this positive outlook to India's strong macro stability: improving terms of trade, a declining primary deficit, and low inflation volatility. Morgan Stanley also projected a mid-to-high teens earnings growth annually over the next three to five years, driven by three key factors: a budding private capital expenditure cycle, cleaner corporate balance sheets thanks to deleveraging, and a structural increase in discretionary spending. The report, quoted by ANI, referred to the ongoing geopolitical developments and said that they have shaped a new and more assertive stance on national security. This included a tougher doctrine on terror, which could deter future threats and support more decisive action from the government. Notably, the recent boost in India's military performance was also taken as a sign of improved strategic and combat capabilities. Tired of too many ads? go ad free now Looking ahead, Morgan Stanley expected India to outperform other emerging markets. 'India's real policy rate relative to the US is turning up in the coming months and could support India's relative outperformance to EM in the coming months,' it noted. Though the outlook remains largely positive, the report also cited some weak sports and catalysts. Key factors that could boost India's market included a softer stance from the RBI, possible GST rate cuts, a trade agreement with the US, and stronger-than-expected growth figures. Globally, developments in US monetary policy, the state of the American economy, China's deflationary pressures, and broader geopolitical risks will remain key external factors. India's lower sensitivity to global trends means it may outperform in a bear market scenario, but underperform in a bullish global run. In terms of investment strategy, the report recommended a tilt towards domestic cyclicals over defensive and export-oriented sectors, suggesting that investors focus on India's internal growth drivers rather than relying on global demand.
