It was despite the fact that market was not yet factoring in a rating upgrade, the report said.
"We assign a high likelihood of a sovereign ratings upgrade for India as most macro indicators have exhibited improvements in past two years," DB Group managing director and head of research Abhay Laijawala said while unveiling 'India equity strategy: 2015 outlook' here on Thursday.
The rating upgrade for the country will happen shortly. However, it will depend on the forthcoming annual Budget, he said.
The BJP-led government at the Centre will present its first full-fledged annual Budget for fiscal year 2015-16 next month.
Talking about the key risk areas for the country's economy, the report said that they will be guided by external factors rather than that of domestic ones.
"Key risks for the country's economy are more external than domestic ones in nature," Deutsche Bank vice president Abhishek Saraf said, adding, "We do see four areas of risks haunting the growth of the country's economy."
The four risk areas include stronger than anticipated slowdown in Europe and China, stronger than anticipated normalisation by the Federal Reserve and oil price holding, he added.
The economy has indeed witnessed a turnaround since 2012, when it faced imminent threat of ratings downgrade from global rating agencies.
"The upward revision in the outlook from negative to stable in September 2014 was a first development suggesting a perceptibility improving outlook for the Indian economy. While market is not yet factoring in a rating upgrade, we believe that rating agencies may surprise markets by a likely rating upgrade," the report said.
"The Sensex may reach to the level of 33,000 by the end of the current calendar year. We are setting year-end (December 2015) Sensex target at 33,000 (imputed Nifty target of 9,936), implying an upside of 23 per cent from current levels," it said.
The cut in global crude oil will help the country's economy grow further, the report said.
The price of crude oil per barrel, which was at $90.8 a year ago, has come down to the level of $74.3 at present, coupled by the hike in excise duty on the crude which was likely to help government save oil subsidy amount to the tune of Rs 71,500 crore, which may be used for infrastructural development this year, the report said.
On rate cut, the report said that key policy rates may come down by 50 bps (0.5 per cent) by March, which will be followed by a further rate cut by 50 bps by the first half of the next fiscal year.