Buy Hindalco; target of Rs 570: Motilal Oswal

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26 Aug, 2025 12:21

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Consolidated net sales rose 6% YoY (down 5% QoQ) to INR532b, 6% above our estimate of INR501b. Sales were driven by record-high production at the aluminum upstream vertical and better copper realizations. Consolidated EBITDA fell 52% YoY and 34% QoQ to INR35b, 39% below our estimate of INR58b. EBITDA was impacted by rising input costs, an adverse forex impact and unfavorable macros. Copper EBITDA rose 40% YoY to INR5.5b, significantly above our estimate, led by higher volumes of CC rods, higher realizations and better TC/RC. India aluminum sales volume rose 7% YoY to 349kt, while copper sales volume was down 1% YoY at 109kt. Trial production has started at the new 34kt aluminum extrusion facility at Silvassa. APAT was down 60% YoY and 38% QoQ at INR14b due to a decline in EBITDA and higher interest expenses. For 9MFY23, sales rose 20% YoY to INR1,673b, while EBITDA/PAT declined 18%/20% to INR173b/INR77b.

We maintain our Buy rating and lower our SoTP-based TP to INR570 (from INR600 earlier). A weak European economic scenario remains the key risk to the sector.

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