Shares of Aditya Birla Capital are in focus after Morgan Stanley assigned an overweight rating on the stock, citing expectations of improved growth momentum and scope for further re-rating on sustained execution.
The stock ended flat at ₹360.80 on the BSE. The brokerage has set a price target of ₹427 on the stock, suggesting over 18 per cent increase.
“We believe the share price will rise relative to the country index over the next 60 days,” Subramanian Iyer, Equity Analyst, Morgan Stanley India Company Pvt Ltd, said in a note.
The brokerage projects NBFC loan growth to pick up to around 23 per cent y-o-y from with 21.7 per cent in Q2, while profit after tax growth is expected to accelerate sharply to about 27 per cent y-o-y from a subdued 4 per cent in the previous quarter.
Morgan Stanley noted that net interest margins are likely to remain stable on a q-o-q basis, with potential upside over the medium term as sustained growth in unsecured consumer loans could lift investor confidence in margin expansion from FY26 onwards. The brokerage also expects return on assets to continue improving, aided by a relatively low cost-to-assets ratio following a temporary spike in the previous quarter.
On asset quality, the report said credit costs are expected to remain stable and stay below the company’s articulated normalised range, which should support earnings visibility. While the stock has already performed well in calendar year 2025, Morgan Stanley believes there is still room for further re-rating if execution remains consistent across its key businesses.
However, the brokerage flagged sharp increase in bad loans, especially in personal unsecured segment; slowdown in loan growth in lending business; and adverse regulatory and APE growth outcomes in life insurance business as the downside risks.