Apple To See 20% Of Five-Year User Growth From India, But Caveats Ahead: Morgan Stanley Analysts

Morgan Stanley analysts in a note highlighted that India is poised to play a significant role in driving both Apple’s revenue and installed base growth over the next five years. They attribute this potential to India’s ongoing “economic boom” as well as Apple’s investments in manufacturing within the country.

According to a CNBCTV18 report, the note also emphasised an upward revision in the price target driven by India, with the new target set at $220, compared to the previous $190. Furthermore, in a more optimistic scenario, the bull-case valuation was projected to reach $270. Morgan Stanley further designated Apple as their top pick in light of these developments.

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According to the assessment by Morgan Stanley analysts, Apple could experience a significant shift in revenue growth over the next five years. They anticipate that the country’s contribution to Apple’s revenue growth could increase to 15%, which is a notable contrast to the previous five years where it stood at 2%. Currently, this translates to $6 billion. Additionally, the analysts project that the country could account for 20% of Apple’s installed base growth.

In their evaluation, the analysts considered several factors contributing to their assessment. These factors include the advancements in electrification within India, as well as Apple’s evident endeavours to establish a manufacturing and retail presence in the country. Additionally, a survey commissioned by Morgan Stanley revealed that Indian consumers exhibit a higher inclination and purchasing power for Apple iPhones, further supporting the growth potential in the Indian market.

At the same time, the analysts issued a cautionary statement, stating that if India falls short of achieving its demographic and economic growth targets, they do not anticipate Apple to reap the same level of benefits from the country.

However, Morgan Stanley’s fundamental thesis remained bullish. “All-in, this means that India will be just as important to Apple’s growth algorithm over the next 5+ years as China was in the last 5 years, something we believe the market underappreciates today,” the analysts said, CNBC reported.