Buy Hindalco; target of Rs 730: Motilal Oswal

Motilal Oswal's research report on Hindalco

3QFY25 consolidated net sales stood at INR584b (+11 YoY/flat QoQ), in line with our est. of INR595b, aided by better realization. Consolidated EBITDA stood at INR76b (+29% YoY/-4% QoQ), in line with our est. of INR77b, driven by lower costs and operating efficiencies. APAT stood at INR38b (+61% YoY/-12% QoQ), in line with our estimate. For 9MFY25, revenue stood at INR1736b (+9% YoY), EBITDA came in at INR230b (+34% YoY), and APAT was INR113b (+63% YoY). Net debt-to-EBITDA ratio rose to 1.33x in 3QFY25 from 1.19x in 2QFY25.

Outlook

At CMP, the stock trades at 5x EV/EBITDA and 1.1x P/B on FY27E. We reiterate our BUY rating on HNDL with a revised SoTP-based TP of INR730.