Buy Hindalco Industries; target of Rs 275: ICICI Direct

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26 Aug, 2025 12:21

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Hindalco reported a steady Q4FY18 performance. Domestic operations reported a topline of Rs 11,681.1 crore (up 5.9% YoY, 6.0% QoQ) higher than our estimate of Rs 11,072.3 crore. The aluminium segment reported sales of ~321000 tonne (our estimate: ~330000 tonne) while copper sales were at ~108000 tonne (our estimate: ~105000 tonne) Reported EBITDA came in at Rs 1257.6 crore (down 6.7% YoY, 4.1% QoQ), broadly in line with our estimate of Rs 1267.5 crore. The resultant EBITDA margin was at 10.8% (vs. Q4FY17: 12.2%, Q3FY18: 11.9%, our estimate: 11.4%). The aluminium segment reported an EBITDA of Rs 920 crore (our estimate: Rs 925 crore) while the copper segment reported an EBITDA of Rs 329 crore (our estimate: Rs 343 crore) For the quarter, Hindalco reported other income of Rs 204.9 crore, depreciation of Rs 459.8 crore along with interest and finance cost of Rs 446.4 crore. Ensuing reported PAT was at Rs 377.0 crore. Hindalco announced a final dividend of Rs 1.2/share.

We expect margins to remain flattish in the range of 12-13% in FY18-20E. We value Hindalco on an SOTP basis and arrive at a target price of Rs 275. We maintain our BUY recommendation on the stock.

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