International brokerage Morgan Stanley has picked its winners for the subsequent leg of India’s development story, naming a 10-stock focus record that leans exhausting into Financials, Shopper Discretionary and Industrials, the sectors it’s betting on as India’s capital expenditure (capex) cycle turns. Each single identify on the record carries an “obese” score.
The record, put out by strategists Ridham Desai and Nayant Parekh in a report titled “A Lengthy Method Up” dated September 4, 2026, contains Maruti Suzuki India, Trent, Lenskart Options and Varun Drinks from the consumption area; Bajaj Finance and ICICI Financial institution from financials; Larsen & Toubro (L&T) from industrials; UltraTech Cement from supplies; Status Estates from actual property; and Adani Energy from utilities.
Widest Hole Between Winners And Laggards
Adani Energy is the standout on the record, up 71% over the previous 12 months, a 79-percentage-point outperformance towards the MSCI India index. Bajaj Finance and Larsen & Toubro additionally outperformed comfortably, up 19% and 11% respectively over the identical interval.
On the different finish, Trent is the largest laggard, down 47% over 12 months, a 45-percentage-point underperformance towards the index. Maruti Suzuki India and UltraTech Cement additionally declined, down 13% and 11% respectively, although each stay overweight-rated picks. Lenskart Options, a more moderen itemizing, doesn’t but have a full 12-month efficiency observe document within the report.
Inventory picks by Morgan Stanley Analysis in September 2026
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Why These Sectors
Morgan Stanley’s obese name on Financials rests on the view that web curiosity margins (NIMs) for banks are troughing, with sturdy credit score development and benign credit score prices anticipated to help a powerful earnings cycle. ICICI Financial institution and Bajaj Finance are the brokerage’s picks within the area.
On Industrials, the brokerage pointed to a pickup in personal capital expenditure throughout power, mining, defence, fertilisers, semiconductors and knowledge centres as the important thing driver, with Larsen & Toubro its most popular identify.
On Shopper Discretionary, Morgan Stanley expects sturdy consumption development helped by decrease rates of interest, tax cuts and rising incomes, a thesis mirrored in its obese calls on Maruti Suzuki India, Trent and Lenskart Options, although two of these three names have underperformed the index over the previous yr.
The brokerage stays cautious on Supplies total (underweight, -300 foundation factors) however continues to want UltraTech Cement amongst home supplies names over globally uncovered ones. It’s underweight Utilities (-100 foundation factors) given wealthy valuations, even because it stays obese on Adani Energy particularly.
The Greater Image
The main focus record sits inside Morgan Stanley’s broader argument that India is in a multi-quarter development upcycle, with a base-case Sensex goal of 89,000 by June 2027, implying 16% upside from present ranges. The brokerage has stated it sees India’s latest valuation de-rating as cyclical reasonably than structural, pushed by a development hole with the remainder of the world that’s now narrowing.
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