Morgan Stanley sees Sensex at 50,000 in 2021, raises index EPS

Brokerage believes the economic growth cycle is not fully priced in; equity market may have more legs before it tops out

Morgan Stanley expects the benchmark Sensex top the 50,000 milestone by 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