Buy Hindalco Industries, target price Rs 730: ICICI Securities

ICICI Securities has maintained a buy call on Hindalco Industries with a target price of Rs 730. The current market price of Hindalco is Rs 607.1. Hindalco Industries, incorporated in 1958, is a Large Cap company with a market cap of Rs 137271.83 crore, operating in Metals - Non Ferrous sector.

Hindalco's key products/revenue segments include Copper/Copper Products, Aluminium, Other Operating Revenue, Sale of services for the year ending 31-Mar-2024.



Financials
For the quarter ended 31-12-2024, the company has reported a Consolidated Total Income of Rs 58899.00 crore, down -.64% from last quarter Total Income of Rs 59278.00 crore and up 10.95 % from last year same quarter Total Income of Rs 53088.00 crore. The company has reported net profit after tax of Rs 3734.00 crore in the latest quarter.

The company's top management includes Mr.Kumar Mangalam Birla, Mr.Satish Pai, Mr.Praveen Kumar Maheshwari, Mrs.Rajashree Birla, Mr.Askaran Agarwala, Mr.Sushil Agarwal, Mr.Yazdi Piroj Dandiwala, Ms.Alka Marezban Bharucha, Mr.Vikas Balia, Mr.Sudhir Mital, Mr.Kumar Mangalam Birla, Mr.Kailash Nath Bhandari, Mr.Satish Pai, Mr.Praveen Kumar Maheshwari, Mrs.Rajashree Birla, Mr.Askaran Agarwala, Mr.Sushil Agarwal, Mr.Yazdi Piroj Dandiwala, Ms.Alka Marezban Bharucha, Mr.Vikas Balia, Mr.Sudhir Mital, Mr.Kailash Nath Bhandari. Company has Price Waterhouse & Co Chartered Accountants LLP as its auditors. As on 31-12-2024, the company has a total of 225 Crore shares outstanding.

Investment Rationale
ICICI Securities expects Hindalco's India performance to benefit from lower cost at upstream Al, despite waning alumina price tailwinds. In the near term, higher VAP from Aditya would lift overall margins. In the Cu division, despite a sharp correction in spot TC/RC margins, the brokerage expects the IGT facility to aid margins. On the cost front, they expect further efficiencies when captive coal from Meenakshi and Chakla is consumed. On balance, I-Sec retains its positive stance on Hindalco with an unchanged target price of Rs 730 based on 6x FY27E EBITDA. The key risks are a sharp drop in LME Al or metal premium; lower-than-expected spreads at Novelis and slower-than-expected ramp up of Indian downstream capacity.

Promoter/FII Holdings
Promoters held 34.64 per cent stake in the company as of 31-Dec-2024, while FIIs owned 28.04 per cent, DIIs 24.22 per cent.