Edelweiss Securities initiates coverage on Aditya Birla Capital, sees 42% upside

Edelweiss Securities has initiated coverage with Buy rating on Aditya Birla Capital and set a target price at Rs 199, implying potential upside of 42.5 percent. The stock rallied 1.6 percent intraday on Thursday.

The company is in a sweet spot to capture the financialisation story, it believes.

The research house expects multiple levers to sustain best-in-class growth & improved return ratios.

It has promising blend of businesses; and scalable and sustainable model while its business model shares similarities with successful financial entities like Bajaj and HDFC, Edelweiss said.

Execution of business strategy is key risk to potential valuation re-rating, it said.

Aditya Birla Capital is the holding company for all the financial service businesses of the Aditya Birla Group.

At 13:25 hours IST, the stock price was quoting at Rs 140.20, up Rs 0.55, or 0.39 percent on the BSE.