Motilal Oswal is bullish on Hindalco has recommended buy rating on the stock with a target price of Rs 179 in its research report dated May 07, 2020.
Motilal Oswal 's research report on Hindalco
Hindalco’s (HNDL) subsidiary Novelis’ 4QFY20 results highlight the company’s strength in its high-margin business with EBITDA/t of USD436/t. We lower our FY21/FY22E EBITDA estimates by 7%/4% due to lower-than-expected volumes in Novelis on account of COVID-19. However, we reiterate our Buy rating given the attractive valuation (5x FY22E EV/EBITDA) and ~75% EBITDA contribution from the non-LME business (Novelis and Aleris), which provides more stability to earnings.
Outlook
The stock trades at an attractive valuation of 5.0x EV/EBITDA and 6x P/E on FY22E. We value it at INR179/share based on SOTP. Re-iterate Buy.
For all recommendations report, click here
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