While the Indian markets are continuously rising to make new all-time highs almost day-after-day, some investors have begun questioning valuations and sustainability of the rally. Morgan Stanley is not among those. The research and brokerage firm’s India Managing Director Ridham Desai sees the benchmark NSE Nifty more than tripling to hit 30,000 points in five years from now, effectively growing at a CAGR of over 25%.
Renewed consumption, greatly improved exports and infrastructure spending by the government will lead to capital expenditure by the private sector recovering in the next 12 months, Ridham Desai said at an investor meet this week.
On Nifty 50’s journey to triple the investor returns, Morgan Stanley remains bullish on information technology stocks, and advises staying away from pharmaceutical counters. Here are a few highlights of the insights shared at the Morgan Stanley India Summit:
- GST: Ridham Desai said the dust on India’s most sweeping tax reform will settle down in a quarter or so. He also said that the government is very cautious about interest rates.
- Domestic stocks: While talking about his preference over equities, Ridham Desai said Morgan Stanley prefers domestic companies’ stocks over international ones.
- Pharmaceutical vs Information Technology stocks: Pharma sector has structural problem and valuations are still not as low as those for Information Technology stocks. IT stocks remain Morgan Stanley’s favourites.