Edelweiss is bullish on Aditya Birla Capital has recommended buy rating on the stock with a target price of Rs 199 in its research report dated June 13, 2018.
Edelweiss' research report on Aditya Birla Capital
We initiate coverage on Aditya Birla Capital (ABCL) with ‘BUY’ as: 1) strong parentage, balanced & lower risk lending portfolio (akin to banks) and cross-sell initiatives position it to capture emerging opportunities; and 2) a promising blend of established (NBFC, AMC), transformational (HFC, life insurance) and incubating (health insurance) businesses render it a sustainable & scalable model. ABCL’s diversified business model shares similarities with other successful financial entities like Bajaj and HDFC, which bolsters our conviction.
However, execution of business strategy is the key risk to potential valuation re-rating. Valuing each business, we arrive at SOTP-based TP of INR199 (>40% upside).
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