Morgan Stanley Forecasts India Earnings Outperform Emerging Markets

Jonathan Garner of Morgan Stanley says India is entering a cyclical earnings recovery that will drive mid- to high‑teens earnings growth for the Sensex over the next two years. He cites narrowed valuation premiums (about 18× forward versus EM ~13×), Reserve Bank easing, capex revival and underweight foreign funds as factors that could reverse flows into Indian equities.