Buy Hindalco; target of Rs 920: Motilal Oswal

Motilal Oswal's research report on Hindalco

Consolidated net sales stood at INR660.6b (+14% YoY and +3% QoQ) against our est. of INR637.4b, driven by favorable pricing and a better product mix. Consolidated EBITDA stood at INR89.7b (+14% YoY and +13% QoQ) against our est. of INR74.6b, driven by higher aluminum prices, a better product mix and benefits from a cost mitigation plan. Adj. PAT came in at INR48.7b (+14% YoY and +22% QoQ) against our est. of INR36.4b. The beat was primarily led by a better operating profit from both India and Novelis businesses. Consol. net debt-to-EBITDA ratio stood at 1.23x as of 2QFY26 vs. 1.02x as of 1QFY26.

Outlook

At CMP, the stock trades at 6.1x EV/EBITDA and 1.4x P/B on FY27E. We reiterate our BUY rating on HNDL with an SoTP-based TP of INR920.