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What should investors do with Hindalco post Q1 results: Buy, sell or hold?

Hindalco Q1: Consolidated revenue rose 40.3 percent on-year to Rs 58,018 crore, as compared to a revenue of Rs 41,358 crore registered in the year-ago quarter, the company said on August 10.

August 11, 2022 / 09:56 AM IST
Hindalco Industries

Hindalco Industries

 
 
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Hindalco Industries share price fell in the early trade on August 11 a day after the company posted its June quarter earnings.

Hindalco Industries (Hindalco) reported a 47.8 percent rise in its consolidated net profit at Rs 4,119 crore for the first quarter ended June 2022 as against Rs 2,787 crore recorded a year ago.

On a sequential basis, the profit has increased 7 percent from Rs 3,851 crore earned during the January - March period. This was by far the highest quarterly consolidated PAT for the company.

Consolidated revenue rose 40.3 percent on-year to Rs 58,018 crore, as compared to a revenue of Rs 41,358 crore registered in the year-ago quarter, the company said on August 10.

On a sequential basis, the revenue scaled 4 percent from Rs 55,764 crore recorded in the previous quarter.

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Here is what brokerages have to say about stock and the company post June quarter earnings

CLSA

Brokerage house CLSA has maintained buy rating on the stock with a target at Rs 525 per share. The brokerage feels that the domestic profitability in the quarter gone by surprised positively with India EBITDA of Rs 3,600 crore, which was above the estimates.

The integrated aluminium EBITDA/t fell 14 percent QoQ to USD 1,361.

We expect profitability to recover in H2 as coal costs soften and with 60 percent EBITDA from its conversion business, company remains well placed, reported CNBC-TV18.

Jefferies

Jefferies has kept hold rating on the stock and raised the target to Rs 380 from Rs 310 per share.

The Q1 EBITDA was up 15 percent QoQ & is 24 percent above our estimate, while EBITDA is led by better-than-expected margin across businesses, said Jefferies.

India aluminium EBITDA/t is coming off from Q4 peak and expect further contraction in India aluminium EBITDA/t, Jefferies feels.

Brokerage house raises FY23-24 EPS estimate by 9-13 percent, reported CNBC-TV18.

Motilal Oswal

The full-year EBITDA/t guidance for Novelis, after its 1Q result, implies an EBITDA of USD505/t for 9MFY23, in line with our estimate. Novelis' management continues to highlight the strong demand for beverage cans as the mainstay for secondary aluminum demand, in addition to rising demand from the Automotive business as semiconductor shortages ease out.

The management is focused on the downstream business in India, with the upstream aluminum business at least two years away from an investment decision.

We maintain our Buy rating with a SoTP-based revised Target Price of Rs 525 (from Rs 490 earlier). A slowdown in China remains the key risk to our call.

At 09:22 hrs Hindalco Industries was quoting at Rs 434.20, down Rs 5.85, or 1.33 percent on the BSE.

Disclaimer: The views and investment tips expressed by investment 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.
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first published: Aug 11, 2022 09:56 am
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