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Last Updated : May 11, 2020 01:43 PM IST | Source: Moneycontrol.com

Buy Hindalco; target of Rs 179: Motilal Oswal

Motilal Oswal is bullish on Hindalco has recommended buy rating on the stock with a target price of Rs 179 in its research report dated May 07, 2020.

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Motilal Oswal 's research report on Hindalco


Hindalco’s (HNDL) subsidiary Novelis’ 4QFY20 results highlight the company’s strength in its high-margin business with EBITDA/t of USD436/t. We lower our FY21/FY22E EBITDA estimates by 7%/4% due to lower-than-expected volumes in Novelis on account of COVID-19. However, we reiterate our Buy rating given the attractive valuation (5x FY22E EV/EBITDA) and ~75% EBITDA contribution from the non-LME business (Novelis and Aleris), which provides more stability to earnings.


Outlook


The stock trades at an attractive valuation of 5.0x EV/EBITDA and 6x P/E on FY22E. We value it at INR179/share based on SOTP. Re-iterate Buy.


For all recommendations report, click here


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First Published on May 11, 2020 01:43 pm
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