Buy Hindalco Industries; target of Rs 830: ICICI Securities

ICICI Securities research report on Hindalco Industries

Hindalco Industries’ (HNDL) Q1FY25 consol. EBITDA was 5% ahead of Street’s estimate. Key points: 1) Record copper (Cu) EBITDA of INR 8.05bn on account of higher TC/RC margins and higher downstream sales volume. 2) Al (upstream) EBITDA/te was aided by higher LME Al prices and benign cost. 3) India operations reported net cash position of INR 17bn. 4) Consol. net debt/EBITDA was at 1.24x vs. 1.73x a year ago. Management expects to start the upstream capex in India across all three products – alumina, Cu and Al – aided by its healthy balance sheet that sports sufficient headroom for growth.

Outlook

At Novelis, we expect rejuvenated beverage can volumes and softening costs would maintain EBITDA in the range of USD 535-545/te. Maintain BUY and a TP of INR 830 on 7x FY26E EBITDA.