AB Capital shares surge 1.72% in a weak market today after Morgan Stanley upgrades stock

AB Capital shares witnessed a sharp surge, trading at ₹170.52, up 1.72%, amidst a broadly weak market. This uptick comes after Morgan Stanley upgraded the stock to ‘Overweight’ from ‘Equal Weight,’ setting a target price of ₹247.

Morgan Stanley’s Rationale:

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  • Strong Potential: The firm forecasts a 20% AUM CAGR and an 18% EPS CAGR for FY24-27, resulting in an ROE of over 15% by FY27 for AB Capital’s NBFC business.
  • Attractive Valuation: At its current price, AB Capital’s NBFC arm is valued at just 0.9x P/BV (Mar-26 BV), offering a significant margin of safety.
  • Resilience: Despite a 24% dip in the stock over the last three months (compared to a 5% decline in the Sensex), Morgan Stanley believes AB Capital enjoys robust funding access due to its parentage and has consistently managed asset quality well.

Broader Market Performance:

The stock’s strong performance stands out against the backdrop of market declines:

  • Sensex: Down 646.53 points (-0.84%) at 76,732.38.
  • Nifty: Down 201.25 points (-0.86%) at 23,230.25.
  • Bank Nifty: Down 415.80 points (-0.85%) at 48,318.35.

AB Capital’s surge underscores investor optimism following the Morgan Stanley upgrade, highlighting its growth potential in the NBFC sector.

Disclaimer: This content is for informational purposes only and not intended as investment advice. Investors should conduct their own research or consult financial advisors before making investment decisions.