Hindalco Industries share price jumped over 4 percent intraday on February 11, a day after the Aditya Birla group company on February 10 reported a 76.2 percent YoY jump in December quarter standalone net profit to Rs 340 crore. In the corresponding quarter of the previous financial year, the profit was Rs 193 crore.
Standalone revenue in Q3 FY21 stood at Rs 11,351 crore, up 11 percent YoY from Rs 10,230 crore. Standalone EBITDA rose 16.7 percent to Rs 1,182 crore against Rs 1,013 crore. The standalone EBITDA margin grew to 10.4 percent against 9.9 percent YoY.
Net sales of Novelis in Q3 FY21 stood at $3.2 billion, up 9 percent sequentially, on account of higher shipments, LME and market premiums. The Hindalco subsidiary saw an all-time high adjusted EBITDA at $501 million in Q3 FY21, up 10 percent sequentially.
In consolidated terms, Hindalco's PAT stood at Rs 1,877 crore, up 77 percent YoY and up 385 percent quarter-on-quarter (QoQ). Consolidated business EBITDA stood at Rs 5,242 crore, up 40 percent YoY and up 12 percent QoQ.
The stock was trading at Rs 291.85, up Rs 12.50, or 4.47 percent, at 1147 hours. It has touched a 52-week high of Rs 294.50. It has touched an intraday high of Rs 294.50 and an intraday low of Rs 279.35.
Global research firm JP Morgan has maintained the "overweight" call on the stock, with the target at Rs 335 per share. It is of the view that Hindalco's strong earnings were driven by Novelis and aluminum. It has increased EPS estimates by 2-18 percent over FY21- 23, adding that the company is well-positioned to benefit from improving aluminum demand, a CNBC-TV18 report said.
CLSA has maintained "buy" on the stock, with the target at Rs 330 per share. It is of the view that Q3 results were largely in line, adding that capital allocation is the next trigger with risk-reward attractive at current levels.
Motilal Oswal,too, has reiterated "buy" on the stock, with a target of Rs 325 per share. It expects aluminum prices to sustain on the back of demand recovery, higher inventory could limit further upside. The firm factors in average LME of $1,780/USD 1,850 per tonne in FY21E/FY22E.
According to Prabhudas Lilladher, led by better visibility on profitability of Novelis’ legacy operations and increased synergies in Aleris, the compnay maintained guidance on sustainable EBITDA margin at $480-500 per tonne. In Indian operations, the quarterly EBITDA run-rate stabilised at Rs 1,500 crore (against Rs 1,250 crore last year) on the back of a strong LME and measured cost increase.
"Driven by strong earnings outlook and comfortable B/S, the brokerage firm has reiterated buy with a target of Rs 305, EV/EBITDA of 6x FY22E," it said.Disclaimer: The views and investment tips expressed by experts on moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.