Nifty will triple in 5 years

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. The projected jaw-dropping growth is not unprecedented, Ridham Desai said, adding: “If you remember between 2003-2007 Nifty earnings compounded at 39 percent and the index was up seven-fold, we expect earnings to compound by 20 percent in the next five years which could take the index towards 30,000. These are very modest estimates.”

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.

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