Equity Alert
Morgan Stanley stays underweight on L&T Fin despite target hike
This story was originally published at 10:57 IST on 31 December 2025
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Equity Alert: Morgan Stanley stays underweight on L&T Fin despite target hike
MUMBAI--1035 IST--Global brokerage Morgan Stanley has raised its price target on L&T Finance by nearly 12% to INR 160 from INR 143, citing improved earnings visibility and operating assumptions, according to an NDTV Profit report. However, the brokerage has maintained its 'underweight' rating on the stock on the back of continued valuation concerns and return ratios. At 1032 IST, shares of the company traded almost 2% higher at INR 311.20 on the National Stock Exchange.
The brokerage upgraded the stock's 2025-26(Apr-Mar)-FY28 earnings per share estimates by 4-4.3% due to slightly higher margins and tighter cost control, the report said. It has also raised net interest margin estimate to 9.0% from 8.9%, while cutting operating cost estimates by 1–2% over the same period. However, due to persistent stress in parts of retail and microfinance lending segments, the brokerage has increased credit cost expectations to an average 2.34%, from 2.3?rlier.
The brokerage said that current valuations are pricing in a faster recovery in profitability than is likely, given the pace of asset quality normalisation and margin improvement. The brokerage also noted that L&T Finance's business is entirely India-focused, making performance closely tied to domestic credit conditions. While this provides long-term growth opportunity, it also increases vulnerability to cyclical slowdowns in retail lending.
Morgan Stanley remains cautious on the stock's medium-term prospects due to a slowing microfinance credit cycle, which the brokerage believes will limit overall retail loan growth. It expects L&T Finance's retail loan book to grow around 20% compound annual growth rate over FY25–FY28, lower than earlier phases of expansion. (Eshitva Prakash)
Equity Alert: Nomura, Jefferies hike Shriram Fin's target price on MUFG deal
MUMBAI--0955 IST--Global brokerages were positive on Shriram Finance, reiterating bullish calls on the non-banking finance company's stock on the back of recent investment from Mitsubishi UFJ Financial Group. Brokerages Nomura and Jefferies have hiked their target prices on the stock while maintaining bullish calls. Domestic brokerages had previously put out bullish outlooks on the stock after the INR-396.18-billion investment from Japan-based financial services company, MUFG. At 0937 IST, shares of the company were nearly 1% higher at INR 987.65 and the stock has advanced over 16% in December.
Brokerage Nomura raised its target price on Shriram Finance by over 5% to INR 1,200 from INR 1,140 earlier and maintained a 'buy' recommendation on the stock, according to an NTDV post on social media platform X. The brokerage expects the company's asset under management growth at 20% and a 10-20-basis-point credit cost improvement for the company in next three years. It sees a faster growth in its gold loans portfolio in the near term. The company's return on assets, however, is pegged at 3.9% by 2027-28 (Apr-Mar) and is expected to moderate to 3.7% over the next five years. The brokerage expects the company's vehicle and non-vehicle product mix to remain at 80% and 20%, respectively.
Jefferies has maintained a 'buy' recommendation on Shriram Finance while hiking its target price on the stock from INR 1,145 to INR 1,060. The brokerage has raised the company's FY27–28 earnings per share estimates by 5–7%. It expects Shriram's assets under management growth at a compounded annual growth rate of 18-20% over the next three years and expects a 100-bps reduction in cost of funds over next two years. The brokerage sees the company's net interest margins rising, even if the lender passes on some of the cost benefits to customers. Credit costs are expected to decline, while return on asset could rise to 3.6%, in the next five years, the brokerage said.
Morgan Stanley maintained an 'overweight' recommendation on Shriram Finance with a target price of INR 925, according to a CNBC post on X. The brokerage sees the company's assets under management growth improving by 3–4% to reach 18–20% in the long term, boosted by the MUFG deal. The brokerage expects a reduction in cost of funds by 100 bps over two to three years. The brokerage said that it sees a possibility of a structural reduction of 10-20 bps in credit costs as the company retains good customers. However, existing liabilities, especially bonds and retail deposits, will take time to reprice, the brokerage said. (Eshitva Prakash)
Equity Alert: Indices open higher on gains in metal, financial svcs stocks
MUMBAI--0953 IST--Domestic benchmark equity indices opened higher Wednesday, owing to gains in shares of metal and financial services companies. The Nifty 50 breached the 26000-point mark, supported by gains in index heavyweight Reliance Industries, as well as in JSW Steel and Tata Steel. Reliance Industries was up nearly 0.5%.
At 0951 IST, the Nifty 50 index was at 25983.50 points, up 44.65 points or 0.2%, and the BSE Sensex was at 84784.73 points, up 109.65 points or 0.1%.
Shares of JSW Steel and Tata Steel were the top gainers, up nearly 5% and 2%, respectively. This was after the government imposed a safeguard duty of up to 12% on imports of certain non-alloy and alloy steel flat products for a period of three years, citing a surge in imports. Jindal Steel rose over 3%, among the top gainers among Nifty 200 constituents.
Shares of financial services companies such as Jio Financial Services, HDFC Life Insurance Company, and Kotak Mahindra Bank were up 0.4-1%. Bajaj Finserv was the worst hit in the 50 stock index, down nearly 1%.
Barring the Nifty IT, Nifty Realty, and Nifty Healthcare, all other sectoral indices traded with gains. The Nifty Metal was up over 1% and Nifty PSU Bank rose nearly 1%.
Defence stocks were on a positive note, with shares of BEML, Bharat Electronics, Bharat Dynamics, Bharat Forge, and Hindustan Aeronautics up 1-2%. The stocks rose after the Ministry of Defence Tuesday signed contracts worth INR 46.66 billion for battle carbine, and torpedoes. Bharat Forge's shares surged after the company signed its largest small arms contract with the Ministry of Defence worth INR 16.67 billion for supplying indigenously designed and developed close quarters battle carbines.
Among other stocks, HFCL and IFCL were the top gainers among Nifty 500 constituents, up nearly 9% and 7%. IFCL rose after the company monetised around 10% stake in North Eastern Development Finance Corp. for INR 1.22 billion. Meanwhile Asahi India Glass was the worst hit in the index, down nearly 4%. (Adhithya Aji)
Equity Alert: Steel cos rise 3-5?ter govt imposes safeguard duty
MUMBAI--0947 IST--Shares of steel companies rose sharply after the government imposed safeguard duty of up to 12% on imports of some steel products for three years. Shares of JSW Steel, Tata Steel, Jindal Steel, and Steel Authority of India rose as much as 3-5%.
According to a notification by the Ministry of Finance on Tuesday, the duty will apply to products such as hot rolled coils, sheets and plates, cold rolled coils and sheets, metallic coated steel, and colour coated steel. The safeguard duty will be levied at 12% from Apr. 21, 2025 to Apr. 20, 2026, 11.5% in the second year, and 11% in the third year ending Apr. 20, 2028.
Shares of JSW Steel were the top gainers among steel companies and it hit the highest intraday level in over three weeks at INR 1,164 per share. Shares of Tata Steel and Jindal Steel touched their highest levels in over a month and those of SAIL hit a 52-week high of INR 147 per shares. At 0943 IST, shares of these companies traded 2-4% higher.
Owing to this, the Nifty Metal index was the top gainer among sectoral indices, up over 1%. The sectoral index hit a fresh lifetime high of 11164.40 points. (Anshul Choudhary)
Equity Alert: Morgan Stanley raises target price of MCX to INR 11,135
MUMBAI--0845 IST--Morgan Stanley has upgraded the target price of Multi Commodity Exchange Of India to INR 11,135 from INR 6,710 with an 'equal-weight' recommendation. The average daily transaction revenue of the commodity exchange has surged in the past three months due to price action in commodities, the global brokerage said.
On Tuesday, Multi Commodity Exchange of India ended 0.4% lower at INR 10,889. The stock had hit the all-time high of INR 11,219 on Monday.
The brokerage raised estimates materially and sees potential upside risks if transaction volumes are sustained. It estimates an earnings per share of 15% for 2025–26 (Apr-Mar), 20% for FY27, and 24% for FY28, CNBC-TV18 reported. At current prices, the stock is at 50 times the earnings per share estimate for FY27 and 47.5 times the valuation estimate for FY27, Morgan Stanley said.
At the current annual daily transaction revenue of INR 104 million over FY27 to FY28, the stock is expected to trade at 35 times the price-to-earnings-per-share, which is a 5% premium to the last traded price. (Adhithya Aji)
Equity Alert: Indices seen higher Wed on buying at lower levels
MUMBAI--0844 IST--Benchmark equity indices are expected to see some gains in early trade Wednesday despite lack of fresh triggers. This follows losses in the previous four-five sessions. Analysts expect the Nifty 50 to bounce back this week. Some analysts expect it to remain in a range.
The GIFT Nifty suggests a positive start to the market as it is nearly 188 points higher than the Nifty 50's previous close. On Tuesday, the 50-stock index closed flat at 25938.85 points, closing in negative territory for the fourth straight day. The BSE Sensex closed at 84675.08, down 20.46 points Tuesday.
"Nifty Bank is trading in a sideways structure but losing relative strength compared to the broader market," Emkay Global Financial Services said. "The index faces stiff resistance near 59500, and a failure to cross this level could lead to a decline towards 58500." The index closed 0.4% higher at 59171.25 points on Tuesday.
The US Federal Open Market Committee released the minutes of its Dec. 9-10 meeting after market hours Tuesday. According to the minutes, most officials expect an additional rate cut in 2026 and one in 2027, after the Fed reduced the key interest rates in the previous three meetings.
Benchmark indices on Wall Street closed lower on Tuesday, extending losses for the third consecutive session. All the three major indices were dragged down by losses in information technology stocks Palantir Technologies and Nvidia Corp. Asian market indices, barring China's CSI 300 index, opened lower, with the Hang Seng index the worst performer in the region.
Back home, defence stocks will be in focus after the Ministry of Defence signed contracts worth INR 46.66 billion for battle carbine, and torpedoes. (Arundathi A R)
Equity Alert: Asian indices mixed, China factory activity rises after 8 mos
MUMBAI--0822 IST--Asian equity indices were mixed on Wednesday. China's CSI 300 index was up 0.2?ter official data showed the country's factory activity saw a marginal expansion in December, snapping eight months of contraction. Consumer inflation in South Korea slowed in 2025 according to official data.
The RatingDog China General Manufacturing Purchasing Managers' Index, which is compiled by S&P Global, rose to 50.1 in December from 49.9 in November, according to a report by Reuters. This was in line with an official Purchasing Managers' Index released earlier that indicated factory activity rising. The National Bureau of Statistics' manufacturing purchasing managers' index rose to 50.1 in December from 49.2 in November, above the 50-point mark separating growth from contraction. It beat analysts' forecast of 49.2 in a Reuters poll. The marginal expansion was achieved due to stronger production and domestic demand, which offset a decline in foreign orders. This puts the country on track to achieve its full-year growth target of "around 5%" for 2025 despite a trade war with the US, weak domestic demand, and a property slump, Reuters said.
South Korea's consumer inflation slowed down to 2.1% in 2025 from 2.3% in 2024, in line with with the Bank of Korea's target of 2%. This would potentially support Bank of Korea's case to pause interest rates at the current level for longer, according to a Reuters report. The Bank of Korea kept its interest rates unchanged at 2.50% for the fourth consecutive meeting on Nov. 27. The consumer price index of the country rose to 2.3% in December, in line with forecasts. The index rose 0.3% on a monthly basis as opposed to a 0.2% rise expected by economists, Reuters said.
Markets in Hong Kong and Australia will close early for the holidays while those of Japan and South Korea are shut for the day, according to a CNBC report. Markets in China will be shut on Thursday and Friday, according to a report by the South China Morning Post.
Following were the levels of key Asian indices at 0822 IST:
|
Level |
Last |
Change in % |
| IDX Composite |
8646.938 |
0.03 |
|
S P/ ASX 200 INDEX |
8690.1 |
(-)0.31 |
|
TAIEX |
28865.29 |
0.55 |
|
SSE Composite Index |
3977.0689 |
0.30 |
|
Nikkei 225 Day |
50339.48 |
(-)0.37 |
|
KOSPI |
4214.17 |
(-)0.15 |
|
CSI 300 Index |
4659.3874 |
0.17 |
(Akshat Saksena)
Equity Alert: US indices close lower Tue, down for 3rd straight session
MUMBAI--0742 IST--All three major US equity indices closed slightly lower Tuesday, falling for the third consecutive session. The indices were dragged down by losses in technology stocks Palantir Technologies and Nvidia Corp., both recording back-to-back sessions of a drop.
Shares of Nvidia and Palantir fell 0.4% and nearly 2%, respectively. However, both stocks, along with peers such as Advanced Micro Devices, have seen phenomenal gains this year, according to a CNBC report. Shares of Nvidia have risen 39% during the year, Palantir has surged 139%, and Advanced Micro Devices has jumped 78%. Gains in artificial intelligence stocks are set to continue next year as well, according to Bill Northey of US Bank Asset Management, the CNBC report said.
Shares of communication companies were the highest gainers during the session due to a rise in shares of Meta Platforms, according to a Reuters report. The stock was up over 1%. The company said it would acquire Manus, a Chinese-founded AI start-up, to accelerate its efforts to integrate advanced AI across its platforms such as Facebook and Instagram, Reuters said. A source familiar with the matter told Reuters that the deal to acquire the Singapore-based firm was valued between $2 billion and $3 billion.
Shares of Citigroup fell nearly 1%, a day after the board approved the sale of its Russian unit, AO Citibank, to Renaissance Capital, leading to a pre-tax loss of around $1.2 billion due to currency translation. "We believe investors will look past it as a non-core item and focus more on the idea that resolution of another legacy issue is getting closer to the finish line – a positive for (Citi's) ongoing transformation," R. Scott Siefers, analyst at Piper Sandler, said in a note, according to Reuters.
Russia said it would toughen its stance on negotiations to end the Ukraine war, accusing Kyiv of attacking a Russian presidential palace. This led to a rise in oil prices, with the S&P 500 Energy Sector outperforming its peers, rising 0.7%, according to the Reuters report.
Minutes of the US Federal Reserve's December meeting showed that policymakers were divided over the 25 basis point rate cut earlier this month, CNBC said. "With respect to the extent and timing of additional adjustments to the target range for the federal funds rate, some participants suggested that, under their economic outlooks, it would likely be appropriate to keep the target range unchanged for some time after a lowering of the range at this meeting," the minutes said, according to the CNBC report.
Following are the closing levels of US indices Tuesday:
|
Index |
Level |
Change in % |
|
S&P 500 |
6896.24 |
(-)0.14 |
|
NASDAQ Composite |
23419.08 |
(-)0.24 |
|
Dow Jones Industrial Average |
48367.06 |
(-)0.20 |
(Akshat Saksena)
US$1 = INR 89.91
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
All prices from National Stock Exchange, unless otherwise specified.
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