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Investing.com - Morgan Stanley upgraded Aditya Birla Fashion and Retail Ltd (NSE:ABFRL) from Equalweight to Overweight on Tuesday, setting a price target of INR131.00, revised from the previous target of INR269.00.
The upgrade comes as Morgan Stanley views ABFRL as a "self-help story" with management implementing corrective measures to boost growth and profitability, though the firm notes improvements will likely be gradual and depend on consistent execution.
The investment bank expects profitability improvements to precede revenue growth, forecasting 14% revenue and 27% EBITDA compound annual growth rates for fiscal years 2027-2028, and believes the company is well-capitalized to fund its growth initiatives.
Morgan Stanley highlights ABFRL as a strong play on India’s growing luxury market through its designer-led ethnic and luxury businesses, with the stock trading at 10x F27e EV/EBITDA, which the firm considers an attractive risk-reward ratio.
The upgrade stands out as 80% of sell-side analysts currently maintain Underweight or Equalweight ratings on the stock, indicating limited investor confidence despite Morgan Stanley’s view that "the worst in terms of performance is now behind us."
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