Motilal Oswal's research report on Hindalco
Novelis (HNDL)’s 2QFY24 revenue stood at USD4.1b (down 14% YoY), higher than our estimate of USD3.6b. The YoY decline in revenue was due to lower FRP dispatches; lower metal prices which was partially offset by higher automotive shipments; favorable product mix; and increased product pricing. Adjusted EBITDA was down 4% YoY at USD484m (14% above our estimate of USD424m), while EBITDA/t stood at USD519/t (USD57/t above our estimate of USD462/t). EBITDA/t improved QoQ due to a sharp increase in volumes. APAT was down 9% YoY at USD223m, which was 34% above our estimate of USD167m in 2QFY24.
Outlook
We reiterate our BUY rating on HNDL with an SoTP-based TP of INR580. The stock is trading at 5.6x FY25E EV/EBITDA and 1.2x FY25E P/B.
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