ICICI Direct is bullish on Hindalco Industries has recommended buy rating on the stock with a target price of Rs 275 in its research report dated November 05, 2018.
ICICI Direct's research report on Hindalco Industries
Hindalco reported a steady state performance for Q2FY19. Hindalco’s domestic operations reported a topline of Rs 10833 crore (up 5.1% YoY, down 2.3% QoQ). The aluminium segment reported sales of 326000 tonnes (vs. our estimate of ~330000 tonne) while copper sales were at 79000 tonnes (vs. our estimate of ~75000 tonne) Standalone Hindalco EBITDA came in at Rs 1090.7 crore (down 21.5% YoY, 17.7% QoQ), marginally lower than our estimate of Rs 1130.4 crore. The EBITDA margin was at 10.1% (Q2FY18: 13.5%, Q1FY19: 12.5%). Utkal Alumina reported an EBIDTA of Rs 620 crore, higher than our estimate of Rs 500 crore. EBITDA of Hindalco Standalone + Utkal came in at Rs 1922 crore (vs. our estimate of Rs 1630.4 crore).
Outlook
We continue to value Hindalco on SOTP basis and arrive at a target price of Rs 275. We maintain our BUY recommendation on the stock.
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