Shares of Vedant Fashions Ltd. declined nearly 4% on Monday, February 16, as brokerage firm Morgan Stanley downgraded the stock and cut its target price.
The brokerage downgraded the stock to 'underweight' from 'equal-weight' and cut its target price by 37.7% to ₹400 per share from the previous ₹642 apiece. This also indicates a potential downside of 12% from its previous close.
Morgan Stanley said Vedant Fashions has witnessed three years of weak growth, which reflects structural and competitive pressures.
The analyst added that valuation de-rating could continue. It has cut its FY26-28 revenue estimates by 2%, earnings before interest tax depreciation and amortisation (EBITDA) by 5-7%, resulting in a 7-9% earnings per share (EPS) reduction.
The analyst said it prefers Aditya Birla Lifestyle Brands, on which it has an 'overweight' call and a target price of ₹176 per share.
Of the 11 analysts that have coverage on the stock, six have a 'buy' rating, four have a 'hold' rating and one has a 'sell' rating.
Shares of Vedant Fashions Ltd. were trading 3.7% lower at ₹438.55 apiece around 9.30 am on Monday. The stock has declined 16.7% in the past month and 42.6% in the last six months.