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Sensex Earnings Revised Upwards, Again – Morgan Stanley

October 16, 2009

We have breaking news for you that Asian and Indian Market mover, Morgan Stanley research has revised the BSE SENSEX earnings and target yet again on the back of current strong earnings reported by corporates.

You MUST first read our exclusive coverage about the changing estimates of BSE SENSEX earnings and target by various FIIs in India. In today’s report, Morgan Stanley analyst says that Revenue growth seems to have bottomed out and industrial growth is likely to recover sharply in the coming months.

The strength of the recovery could bear upside depending on execution of policy reforms. The corporate sector seems to have cut costs and thus margins have
improved sharply. The macro environment (i.e., higher consumer price inflation vs. wholesale price inflation after adjusting for food prices) favors a robust rebound in margins in the coming four quarters.

Quick Gun Morgan says – BSE Sensex top-down earnings growth forecast from +10% and +20% in F2010 and F2011, respectively, to 15% and 23%.

Morgan SENSEX Earnings:

Bull Case:
March-10 – Morgan=1035
March-11 – Morgan=1320

Base Case:
March-10 – Morgan=1013
March-11 – Morgan=1247

Quick Gun Morgan has revised the SENSEX target for DEC-2010 to 19,400. While Bull Case estimate is an all time high of 23,647.

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