Motilal Oswal is bullish on Hindalco has recommended buy rating on the stock with a target price of Rs 344 in its research report dated 2 February 2018.
Motilal Oswal's research report on Hindalco
Hindalco’s standalone (HNDL S/A) 3QFY18 EBITDA increased 11% YoY to INR13.1b and adj. PAT increased 54% YoY to INR5b, in line with estimates. Reported PAT at INR3.8b was impacted by INR1.15b provisions toward bauxite mine in Jharkhand. HNDL and Utkal have prepaid debt of INR11.3b in 3Q (INR57b in 9MFY18). Utkal EBITDA increased 73% YoY (+23%) to INR2.47b on higher prices.
OutlookStock is trading at attractive EV/EBITDA of 5.8xFY20E. Net debt/EBITDA ratio has declined to 2.8x in FY18 (from 6.4 in FY16). After de-risking balance sheet, Hindalco is now investing in high-IRR projects to drive growth. Maintain Buy.
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