Buy Hindalco Industries, target price Rs 564: Axis Securities

Axis Securities has buy call on Hindalco Industries with a target price of Rs 564. The current market price of Hindalco Industries is Rs 452.8.

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 101693.18 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 30-09-2021, the company reported a Consolidated Total Income of Rs 48063.00 Crore, up 15.47 % from last quarter Total Income of Rs 41625.00 Crore and up 52.45 % from last year same quarter Total Income of Rs 31528.00 Crore. Company reported net profit after tax of Rs 3417.00 Crore in latest quarter.

Investment Rationale
The brokerage initiates coverage on Hindalco Industries with a BUY recommendation and value the stock at Rs 564 (SOTP-based), implying an upside of 23% from the CMP. The stock is currently trading at 5.4x 12MF EV/EBITDA and appears cheap against its long-term average of 6.5x EV/EBITDA. The company exhibits rerating potential as it expects LME Aluminium prices to remain strong. It believes Hindalco to be a defensive play backed by stable cash flows and lower operational and financial leverage.

Promoter/FII Holdings
Promoters held 34.64 per cent stake in the company as of 30-Sep-2021, while FIIs owned 25.47 per cent, DIIs 20.61 per cent.