The Indian stock market could be headed for a strong year ahead as earnings growth gathers pace and both valuations and investor sentiment move away from extreme levels, according to Wall Street major Morgan Stanley. In its latest India Equity Strategy playbook, the brokerage said India appears well-positioned for a sustained upcycle, supported by improving corporate earnings, a supportive policy backdrop, strong domestic flows and a favourable long-term growth outlook. Here are 12 stocks the brokerage is bullish on.

Maruti Suzuki India

Maruti Suzuki India features on the focus list with an overweight rating. The stock was priced at Rs 13,026 as of June 2, with a market capitalisation of $43 billion and a 12-month return of 6%, outperforming the MSCI India index by 8%.

Trent

Trent carries an overweight rating in the consumer discretionary space. The stock traded at Rs 4,211 and delivered a negative 25% return over the past 12 months, underperforming MSCI India by 24%.

Lenskart Solutions

Lenskart Solutions is among the focus list picks with an overweight rating. The stock was priced at Rs 524 and has a market capitalisation of $10 billion, with an average daily traded value of $19 million.

Varun Beverages

Varun Beverages, a consumer staples company, is rated overweight. The stock traded at Rs 537 and generated a 9% return over the last year, outperforming MSCI India by 11%.

Bajaj Finance

Bajaj Finance remains an overweight-rated financial stock. It was priced at Rs 881 with a market capitalisation of $59 billion and delivered a marginal decline of 1% over the past 12 months.

ICICI Bank

ICICI Bank is another overweight-rated financial sector pick. The stock traded at Rs 1,226 and recorded a 14% decline in the past year, underperforming MSCI India by 12%.

Larsen & Toubro

Industrial major Larsen & Toubro features on the focus list with an overweight rating. The stock was priced at Rs 4,002 and posted a 12% gain over the last 12 months, outperforming MSCI India by 13%.

UltraTech Cement

UltraTech Cement, representing the materials sector, carries an overweight rating. The stock traded at Rs 11,172 and delivered a 2% return over the past year, beating MSCI India by 4%.

Prestige Estates

Prestige Estates is the focus list's real estate pick with an overweight rating. The stock was priced at Rs 1,394 and declined 9% over the last 12 months, underperforming MSCI India by 7%.

Adani Power

Adani Power stands out as the best-performing stock on the list. The utility sector company traded at Rs 236 and delivered a stellar 120% return over the past year, outperforming MSCI India by 124%.