Morgan Stanley Cuts Price Targets for Major Indian Internet Firms Amidst Growth Worries

Overview Morgan Stanley's just slashed price targets for several major Indian internet companies, reflecting growing concerns about the sector's near-term growth. The brokerage's move signals that the earnings downgrade cycle isn't over yet, with factors like slowing growth and rising competition weighing heavily on these firms.

Key Developments

• Delhivery's new target is set at ₹445, down from ₹450, marking a ₹5 reduction.
• Swiggy's target has dropped to ₹414 from ₹455, a significant cut of ₹41.
• Eternal's target price is now ₹417, down by ₹10 from ₹427.
• MakeMyTrip faced the steepest decline, with its target slashed by $65, bringing it down to $113, indicating a major reassessment of its valuation.

Business Impact These adjustments could impact investor sentiment and market positioning for these companies. With the digital economy facing persistent margin pressures, the outlook appears challenging for these players.

Market Context The Indian internet sector is under scrutiny as growth dynamics are expected to slow, particularly in quick commerce. Morgan Stanley anticipates a deceleration in net order value growth for the upcoming December quarter, which could further affect stock performance.

Industry Context The digital economy in India has been experiencing rapid changes, but rising competition and margin pressures are creating a tough environment. Companies like MakeMyTrip are now facing significant valuation challenges, which could reshape their market strategies moving forward.

Looking Ahead Investors will need to keep a close eye on how these companies adapt to the evolving landscape and whether they can regain momentum in the coming quarters.