Morgan Stanley expects India s GDP growth to remain robust, with an anticipated growth rate of around seven per cent in the fourth quarter of FY24 (quarter ending in March 2024).
Also, if interest rates come down globally, the share of allocation towards emerging markets and the growth capital will go up from the institutional investors
India has delivered strong relative earnings, sustaining the strong market outperformance seen in 2022, while macro-fundamentals have withstood tightening financial conditions in the US. “India is set to establish secular economic and earnings outperformance vs EM,” the investment bank said in its 2024 outlook report.
"Consider that household debt/GDP in India is just 19% vs. 48% for China and that only 2% of Indian households have life insurance. Manufacturing and services PMIs have rallied consistently since the end of Covid restrictions in contrast to the rapid fade seen in China. As well, real estate transaction volumes and construction have broken out to the upside," the analysts said in a report.
Morgan Stanley said that it is bullish on India's structural growth outlook and that growth will be driven by a digital infrastructure-empowered lending boom, demographics, domestic demand and improving Foreign Direct Investment (FDI).