Morgan Stanley predicts a significant upside for Indian equities over the next 12-24 months, forecasting the Sensex to reach 95,000 in its base case and potentially 107,000 in a bull case scenario by December 2026. This optimistic outlook is attributed to favorable valuations, improving earnings, supportive government policies, and a turning macro-economic cycle. The brokerage recommends focusing on domestic cyclical sectors, particularly financials, consumer discretionary, and industrials, anticipating a return of foreign investor interest.