Sensex to hit 82,000 in 12 months over macro stability; global slowdown among key risks: Moody's

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Also Read: Nifty 50 to hit 25,816 in 12 months; PL overweight on banks, auto, telecom: ITC, BEML among high conviction picks"With government continuity now in place, we believe the market can look forward to further structural reforms, giving us more confidence in the earnings cycle. Macro stability with rising GDP growth relative to real rates should extend India's outperformance over emerging markets (EM) equities."Earlier, the rating agency revised India's GDP upwards to 6.8 per cent for 2024-25, with headline CPI decelerating to about 4.5 per cent for the year.

Inflation currently is at 4.75 per cent.The report said companies will perform better with earnings growth forecast through 2025-26, which remains 500 basis points higher than consensus. "Our 12-month forward BSE Sensex target is 82,000, implying 14 per cent upside."India is likely to drive a fifth of global growth in the coming decade.

This will be underpinned by increased offshoring of both services and goods, leading to a manufacturing boom, as well as the energy transition and the country's advanced digital infrastructure."India's stock market has been making new highs, and the debate now is over what could take the market materially higher. In our view, the government's mandate is likely to result in policy changes that will lengthen the earnings cycle and surprise the market," said the report.According to the report, the policy reforms of the past decade, including flexible inflation targeting, the GST law, allowing retirement funds to invest in stocks, the bankruptcy code, RERA, and lower corporate tax rates, along with various social reforms and infrastructure buildout have changed the economy's structure for the better.