Prabhudas Lilladher recommended accumulate rating on Hindalco Industries with a target price of Rs 245 in its research report dated February 12, 2019.
Prabhudas Lilladher's research report on Hindalco Industries
Hindalco (HNDL) reported Q3FY19 earnings in line with estimates. Aluminium (AL) operations posted earnings ahead of expectation on the back of better than expected realisations. In the midst of depressed LME prices and severe shortage of domestic coal, AL operations posted 8% YoY (↓5% QoQ) growth in EBITDA against our estimate of flat growth YoY (↓12% QoQ). While, Copper (Cu) operations disappointed due to weaker than expected premiums and lower by-product volumes/realisations. We expect improved margins in Cu operations with the ramp-up of high margin CC rods capacity.
Outlook
Backed by strong business model and attractive valuations, we maintain Accumulate with TP of Rs245, EV/EBITDA of 6x FY20E.
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