
Morgan Stanley has upgraded Aditya Birla Capital (AB Capital) to overweight from equal weight, citing strong growth potential and attractive valuations. The brokerage has set a target price of ₹247, indicating a significant upside from the current market price (CMP) of ₹167.67.
Key Highlights:
- Stock Performance:
- AB Capital’s stock has declined by 24% over the last three months, underperforming the Sensex, which dipped by only 5% during the same period.
- Growth Projections:
- The brokerage forecasts a 20% AUM CAGR over FY24-FY27.
- An EPS CAGR of 18% is expected, resulting in a return on equity (ROE) of over 15% by FY27 for the NBFC business.
- Strengths:
- AB Capital enjoys strong funding access owing to its robust parentage.
- The company has maintained asset quality reasonably well over the years, reflecting prudent management.
Morgan Stanley’s bullish stance on AB Capital is driven by its potential to deliver strong growth and its resilience in managing asset quality amidst market challenges. The upgrade and optimistic target highlight the stock as a compelling opportunity in the financial sector.
Disclaimer: The above information is for informational purposes only and does not constitute investment advice. Please consult your financial advisor before making any investment decisions.