Buy Hindalco; target of Rs 520: Motilal Oswal

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Hindalco reported yet another in-line but weak set of results, largely attributed to lower LME aluminum price (-11% YoY/-18% QoQ); costs also continued to rise resulting in a 36% QoQ decline in consolidated EBITDA in 2QFY23. Consolidated net sales stood at INR562b (+18% YoY/-3% QoQ), 12% beat to our est. of INR501b. Higher YoY sales were driven by strong performance from Asia operations of Novelis and higher copper ASP.  Consolidated EBITDA at INR54b was down 29% YoY/36% QoQ but was in line with our estimate of INR55b. India EBITDA was a significant beat as the cost escalation, especially on thermal coal, was markedly lower than estimate and the company was also carrying low-value inventory. India aluminum sales volume was 341kt (flattish YoY). Copper sales volume at 112kt was +2% YoY /+11% QoQ as the third smelter ramped up. Adjusted PAT stood at INR22b (-36% YoY/ -46% QoQ) on declining EBITDA, but was in line with our estimate of INR23b for the quarter. Hindalco’s 1HFY23 Sales/EBITDA/PAT stood at INR1,142b/INR138b/INR63b, respectively. Sales rose 28% YoY; EBITDA was flat and PAT fell 5% YoY.

We maintain our BUY rating with an SoTP-based revised TP of INR520 (v/s INR480 earlier). China remains the key risk to the sector.

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.