
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:
- 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.