Aditya Birla Capital shares have given multibagger returns of over 100% over the last year. However, global financial firm Morgan Stanley expects the stock to rise further on stable net interest margin (NIM), increased loan growth, and a healthy double-digit growth in profit.
Aditya Birla Capital share price rose more than half a per cent in intraday trade on Wednesday, January 7. The NBFC stock opened at 360.70 against its previous close of 360.70 and rose 0.60% to an intraday high of 362.80.
Aditya Birla Capital share price hit a 52-week high of 369.25 in the previous session on January 6 and a 52-week low of 148.75 on February 17 last year.
As per the BSE data, the NBFC stock has gained 101% over the last one year, while over the last five years, it has jumped 288%.
More steam left?
In a report on January 7, Morgan Stanley said it believes the shares will rise relative to the index over the next 60 days.
The brokerage firm has an ‘overweight’ rating on the stock with a target price of 427. This implies an 18.4% upside from the stock’s January 6 closing of 360.70 on the BSE.
“The stock has done well in the calendar year 2025, but we think there is scope for further re-rating on sustained execution. We estimate that there is about an 80%+ (or highly likely) probability for the scenario,” said Morgan Stanley.
“We expect NBFC loan growth to accelerate to 23% YoY from 21.7% in 2Q. PAT growth should accelerate to 27% YoY from 4% in Q2, which should also interest investors. We expect NIM to remain stable QoQ. However, sustained QoQ loan growth in unsecured consumer loans could lift investor confidence on NIM expansion from Q4F26 onwards,” said Morgan Stanley.
According to the global financial firm, ROA expansion should continue, supported by lower cost to assets after a spike last quarter, while credit costs may remain stable at below the normalized band articulated by the company.
Morgan Stanley said better-than-expected asset quality and credit cost outcomes, faster-than-expected ROE improvement, and abating concerns around unsecured loans are the risks to upside, or the events that could push the stock above its expectations.
On the other hand, a sharp rise in bad loans, especially in the personal unsecured segment, a slowdown in loan growth in lending businesses, and any adverse regulatory and APE growth outcomes in the life insurance business are the risks to downside, Morgan Stanley said.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the broking firm, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
