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Foreign brokerage Morgan Stanley has set Sensex target of 32,500 for December 2015, implying a return of around 14 per cent from the current levels.
The Sensex, up about 35 per cent so far in 2014, is currently trading around 28,500.
"Indian equities are benefiting from the start of a new growth cycle, a benign global environment resulting in a positive shift in terms of trade and reforms, which can lift India's potential growth rate," says Ridham Desai, managing director, Morgan Stanley India.
Another foreign brokerage Citigroup has set a similar December 2015 target for the Sensex at 33,000.
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Growth in the US and China will have a bearing on the performance of the Indian market, says Morgan Stanley.
The brokerage has set a "base case" target of 30,333 and "bull case" target of 36,939.
The brokerage has believes base case has a 50 per cent chance "with moderate rise in US yields, stable global growth and good policy momentum."
The probability of a bull case is 40 per cent driven by "better-than-expected outcomes - most notably on policy - leading to a strong bull market, allowing for a sharp decline in domestic short rates making equities inexpensive."
Meanwhile, Morgan Stanley has assigned a 10 per cent probability of the Sensex slipping to 26,007, "premised on a tepid policy response and, more crucially, poor global conditions."
