What Are Brokerages Saying on Can Fin Homes, Bank of India, Urban Company, and Cello World?
Leading brokerages have shared fresh insights this week across housing finance, banking, consumer tech, and manufacturing. While Morgan Stanley turns bullish on Can Fin Homes, it remains cautious on Bank of India. Meanwhile, Goldman Sachs and Morgan Stanley have initiated opposing calls on Urban Company. Let’s decode what these calls mean for investors.
Morgan Stanley on Can Fin Homes
| Parameter | Details |
|---|---|
| Rating | Overweight |
| Target Price | ₹1,000 (up from ₹970) |
| Q2 Highlights | Positive surprises in Net Interest Margin (NIM) and asset quality |
| Outlook | Loan growth may remain modest near term, but ROE expected to exceed 15% by FY28 — attractive versus peers |
Explanation: NIM (Net Interest Margin) measures profitability of lending — higher NIM means better efficiency. Morgan Stanley’s optimism reflects stable spreads despite rate volatility.
Morgan Stanley on Bank of India
The brokerage maintains an Underweight rating but raises its target to ₹120 (from ₹110), citing robust asset quality and strong other income. However, it warns that once credit costs normalize, Return on Assets (RoA) may compress. Current RoA stands at 0.9% — healthy but below private peers.
Note: RoA (Return on Assets) indicates efficiency of profits earned per rupee of assets. A 0.9% RoA is considered decent for a PSU bank but below private benchmarks like HDFC Bank (~2%).
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CLSA on Automobiles: Festive Acceleration
- Passenger Vehicles (PVs) up 17% YoY and Two-Wheelers (2Ws) up 20% YoY during the festive period.
- Maruti Suzuki and Hero MotoCorp gained the most market share.
- Top picks: Mahindra & Mahindra, Maruti Suzuki, Tata Motors, and Bajaj Auto.
- Despite festive gains, PV volumes remain slightly lower YoY on a cumulative basis.
Insight: CLSA expects the auto rally to broaden as rural recovery and festival demand sustain through Q3 FY25.
Morgan Stanley & Goldman Sachs on Urban Company
Morgan Stanley: Initiates Underweight with TP ₹117. It acknowledges Urban Company’s large market opportunity and brand moat but believes current valuations already price in growth. It expects India Consumer Services (ex-InstaHelp) to reach 30% EBITDA margin by FY28, but high churn may cap upside.
Goldman Sachs: Initiates Neutral with TP ₹140, forecasting a 24% revenue CAGR and 35% EBITDA CAGR through FY25–30E. While execution is strong, GS notes the stock trades at steep valuation multiples — 9x EV/Sales and 64x EV/EBITDA (FY28E) — much above peers but justified by scalability.
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MOSL on Cello World
| Parameter | Details |
|---|---|
| Rating | Buy |
| Target Price | ₹700 |
| Key Triggers | Glassware utilization at 65%, to reach 80% by FY26; expected profitability by 2HFY26 |
| Capex | ₹100–120 Cr for steelware and plasticware capacity expansion at Falna |
| Valuation | Trading at 27x FY27E EPS, RoE/ROCE of 18%/19% |
Interpretation: MOSL expects steady expansion in consumer ware and writing instruments, driven by brand-led restocking and exports. Margin uptick may follow as glassware turns profitable.
Comparative Brokerage Snapshot
| Company | Broker | Rating | Target (₹) | Sentiment |
|---|---|---|---|---|
| Can Fin Homes | Morgan Stanley | Overweight | 1,000 | Positive |
| Bank of India | Morgan Stanley | Underweight | 120 | Neutral to Negative |
| Urban Company | MS / GS | Underweight / Neutral | 117 / 140 | Valuation Caution |
| Cello World | MOSL | Buy | 700 | Positive |
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, observes that brokers are preferring steady compounding stories — NBFCs with improving ROE, auto OEMs with festival-led demand, and consumer manufacturers with pricing power. Tech start-ups like Urban Company, despite operational strength, face valuation fatigue. Accumulating Can Fin Homes and Cello World on dips could offer long-term alpha.
For more analytical perspectives and model-driven insights, explore Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries
- Is Can Fin Homes undervalued among housing finance NBFCs?
- Why is Morgan Stanley cautious on PSU banks?
- Are internet platform valuations still justified in FY25?
- How strong is Cello World’s margin expansion outlook?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
