Buy Hindalco Industries, target price Rs 515: JM Financial

JM Financial has buy call on Hindalco Industries with a target price of Rs 515. The current market price of Hindalco Industries is Rs 329.45. Time period given by analyst is one year when Hindalco Industries Ltd. price can reach defined target.

Hindalco Industries Ltd., incorporated in the year 1958, is a Large Cap company (having a market cap of Rs 72246.60 Crore) operating in Metals - Non Ferrous sector.

Hindalco Industries Ltd. key Products/Revenue Segments include Copper/Copper Products, Aluminium, Other Operating Revenue, Sale of services for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 56057.00 Crore, up 11.11 % from last quarter Total Income of Rs 50453.00 Crore and up 37.75 % from last year same quarter Total Income of Rs 40696.00 Crore. Company reported net profit after tax of Rs 3850.00 Crore in latest quarter.

Investment Rationale
The outlook for Hindalco continues to remain buoyant given a) Novelis – continues to maintain EBITDA/t guidance of ~USD500 b) drop in energy price is likely to cushion margins amidst correction in LME prices c) growth capex to augment capacity in non-LME linked business – Novelis, amidst encouraging demand for FRP products d) enhanced coal security post acquisition of Meenakshi and Chakla coal mines at recent auctions. Post the recent correction, the stock offers an attractive risk reward. Re-iterate BUY with a revised fair value of INR515/sh

Promoter/FII Holdings
Promoters held 34.64 per cent stake in the company as of 31-Mar-2022, while FIIs owned 28.85 per cent, DIIs 19.22 per cent.