Motilal Oswal is bullish on Hindalco has recommended buy rating on the stock with a target price of Rs 190 in its research report dated June 13, 2020.
Motilal Oswal 's research report on Hindalco
Hindalco’s (HNDL) 4QFY20 results highlight the potential for cost reduction in its India business as India EBITDA rose 18% QoQ despite weak LME. Aluminum costs declined 5% QoQ in 4QFY20 and should decline another 4-5% QoQ in 1QFY21, partly off-setting the impact of lower LME. We maintain our FY21/FY22E EBITDA estimates and reiterate our Buy rating on expected deleveraging in FY22E supported by lower capex, cost control and resilient volumes (exports and strong beverage can demand).
Outlook
The stock trades at a reasonable valuation of 5.4x EV/EBITDA and 7.9x P/E on FY22E. We value it at INR190/share based on SOTP. Re-iterate Buy.
For all recommendations report, click here
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