According to Morgan Stanley, India will see an increase in investment, according to Morgan Stanley, the company named a number of stocks that it thinks could benefit from increased capital spending in the economic powerhouse. In a note titled “How to Grow India’s Coming Capex Boom,” Morgan Stanley analysts said they are expecting supply-side factors and are in line with improve demand, promote investment in gross domestic product. “A boom could make Indian stocks look cheaper,” wrote Morgan Stanley analysts led by Girish Achhipalia. “The most important component of returns is the rate of investment. In turn, higher returns drive investments that create a cycle of higher wages, more consumption, more investment and returns. more profit.” The bank thinks India’s investment rate will reach 36% of GDP in the next five years, up from the current rate of around 31%. This implies that capital investment could grow at a compound annual growth rate of 16.7% through 2027, the bank added. India is the world’s fifth-largest economy and is expected to reach a GDP of $3.53 trillion by 2022, according to the International Monetary Fund. Stock Options Morgan Stanley sees industry and finance as the main beneficiaries of the investment boom. Achhipalia added: “Capital goods, engineering and construction as well as major banks are the direct drivers of India’s rising investment capital. One of the bank’s top picks is India’s largest construction company Larsen & Toubro. The bank believes L&T is at a “sweet spot” to benefit from the growth of its investments, with share prices being “closely correlated” with the public’s invested capital. The stock is also attractively priced, Achhipalia added. Morgan Stanley has a share price target of 2,178 Indian rupees ($27.50), which closed at 1,962 Indian rupees on Monday, representing a potential gain of 11%. Read more Forget the oil – coal is hot right now. Here are 2 stocks to play it with, according to Sterling supporters that have rallied against the dollar. How low is this, according to experts Want to invest in real estate? These REITs are among analyst favorites. Morgan Stanley also likes ICICI Bank and State Bank of India (SBI). “Liquidity banks or franchisees are best placed to deliver profitable revenue growth… Large banks are best placed to leverage capital, we believe ICICI and SBI remains our preferred choice for playing the investment cycle,” Achhipalia said. Achhipalia believes that ICICI is one of the best placed among private banks to deliver high earnings in the current cycle and has launched a price target of Rs 1,225 on the share. ICICI shares closed at around Rs 907 crore on Monday, implying a potential gain of 35.1%. He also “materially” raised his loan growth for SBI – India’s largest public sector bank. The stock is also trading below its long-term average, making it look attractive from a valuation perspective. Morgan Stanley has a price target of 675 Indian rupees on SBI, which closed at around 555 Indian rupees on Monday – an implied gain of 21.6%.
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