Broker's call: Hindalco

Hindalco a Buy: Citi

Citigroup has maintained its ‘Buy’ rating on Hindalco with a target price of Rs 164. Hindalco has underperformed the Sensex by 24% in the past year on plant delays, weak LME prices and Mahan coal block uncertainty. PAT gains in both years were from higher realisations; lower depreciation and interest higher ownership of Novelis Korea and higher profits from other businesses. Citi has value dHindalco standalone at 7.5x EV/EBITDA at the top end of the trading range for global peers and at a slight premium to its average EV/EBITDA of 6.9x for the past 4.5 years.