New Delhi, April 9 -- Indian markets may be on the cusp of a significant upcycle, supported by improving macro fundamentals, earnings momentum, and policy support, noted a report by Morgan Stanley.

The global financial services firm has projected a strong recovery in Indian equities in its latest India Equity Strategy Playbook.

The report notes that "trailing performance, valuations, positioning and earnings all support a major recovery in Indian stocks over the coming months," adding that the market "appears set up for a big move" after a period of weak returns and compressed valuations.

The brokerage has set a Sensex target of 95,000 by December 2026, implying a potential upside of about 22 per cent from current levels. It said this ...