Morgan Stanley has provided its latest outlook on the Non-Banking Financial Companies (NBFCs) sector, highlighting its key overweight picks, preference changes, and ratings across various stocks.

Key highlights from Morgan Stanley’s analysis:

  1. Overweight-rated stocks:
    • Morgan Stanley’s top picks for meaningful upside with a margin of safety are:
      • PNB Housing Finance
      • Shriram Finance
  2. Changes in preferences:
    • Upgraded in preference:
      • Bajaj Finance: Moved higher in the overweight (OW) category.
      • SBI Life: Retains OW rating with an improved preference.
    • Lowered in preference:
      • HDFC Life: OW rating retained but lowered in preference.
      • Can Fin Homes: OW rating retained but moved down in preference.
  3. Equal-weight-rated stocks:
    • Aditya Birla Capital and Cholamandalam Investment and Finance Company are the top picks in the equal-weight (EW) category.
  4. Advancements in weightings:
    • ICICI Prudential Life (IPRU Life) and SBI Cards have advanced a few notches in their weightings.
  5. Downgraded in weightings:
    • Muthoot Finance and PB Fintech have moved to the bottom of the list.
  6. Underweight-rated stocks:
    • Morgan Stanley has retained underweight (UW) ratings on:
      • LIC Housing Finance
      • L&T Finance
      • MCX

Morgan Stanley’s analysis reflects a cautious yet optimistic approach, with a focus on select NBFCs that offer strong growth potential, while highlighting risks for others.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Readers should perform their own research or consult a financial advisor before making investment decisions.

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