The markets are falling but there are some value buys that brokerage houses are recommending at the moment. Morgan Stanley expects Aditya Birla Capital share price to outperform Nifty 50 and Sensex in another 60 days. It has maintained its Overweight rating on the stock with a target price of Rs 235. This implies over 50% upside for the share price from current levels.
Morgan Stanley expects Aditya Birla Capital to benefit from new RBI norms
According to the report by Morgan Stanley, Aditya Birla Capital is very well set to benefit from RBI’s new regulatory guidelines regarding reducing risk weight for bank loans to NBFCs and microfinance. Also, the company is a play on improving unsecured credit.
“The current price implies the NBFC at 0.8x P/BV (Mar-26 BV). Our March 2026 price target of Rs 235 (54% upside) is based on 1.5x FY27 P/B for the NBFC. We see a good entry point with a high margin of safety and upside potential,” said Morgan Stanley. “We estimate that there is about an 80%+ (or “highly likely”) probability for the scenario.”
Morgan Stanley say sector sentiment to improve
Moving on to the big picture, the brokerage firm expects the sector sentiment to uplift due to easing following industry-supportive measures and commentary by the new RBI Governor.
The report states that better-than-expected asset quality, credit cost outcomes, faster-than-expected ROE improvement, and concerns around unsecured loans abate a key risk to ABC.
Aditya Birla Capital’s performance in Q3
Aditya Birla Capital posted a 4% year-on-year fall in consolidated net profit to Rs 708 crore in the third quarter of the current financial year, as against Rs 736 crore a year ago. The consolidated revenue for the reporting quarter rose 10% YoY to Rs 10,949 crore in Q3 FY25.
It’s NBFC unit, Aditya Birla Finance, reported a net interest income of Rs 1,734 crore, up 5% YoY. However, its net interest margin declined to 6% in Q3 FY25 from 6.88% in the same period a year ago.
Aditya Birla Capital stock performance
Aditya Birla Capital’s share price has risen 2.3% in the past five trading days. The stock has fallen over 9% in the last one month and 31% in the past six months. The share price of Aditya Birla has fallen 15% in the last one year.
To compare, the benchmark index, the Nifty 50 has fallen 2% in the past five sessions. The index has fallen 5.3% in the last one month and 12.5% in the last six months. The index return has been flat at 0.65% in the past one year.