Buy Hindalco, target price Rs 225: Kotak Institutional Equities

Kotak Institutional Equities has maintained buy rating on Hindalco Industries with a target price of Rs 225. The stock ended up 0.5 per cent at Rs 108.75 on Tuesday while the BSE Sensex closed 371.44 points up (+1.17 pre cent) at 32,114.52.

Hindalco Industries Ltd., incorporated in 1958, has a market cap of Rs 24428.34 crore.

Investment Rationale


Investors are concerned regarding Novelis’ exposure to North America and Europe, said Kotak Institutional. Novelis would suffer a volume loss in the auto segment due to lockdowns in FY21but concerns appear overblown, it said. Hindalco’s shares offer attractive riskreward after the recent correction, it said.

Financials

For the quarter ended December 31, 2019, the company reported consolidated sales of Rs 29197.00 crore, down -1.55 per cent from last quarter sales of Rs 29,657 crore and down -12.09 per cent from last year's same quarter sales of Rs 33,212.10 crore. The company reported net profit after tax of Rs 1,060 crore in the latest quarter.

Promoter/FII Holdings

Promoters held 34.65 per cent stake in the company as of thirdbquarter ending December 31, 2019 while FIIs held 20.74 per cent, DIIs 24.87 per cent and public & others 19.31 per cent.