Hindalco’s Outlook Strong On Higher LME Prices: Motilal Oswal

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Motilal Oswal Report

Hindalco Industries Ltd.’s Q3 FY21 earnings for its India business was strong, as expected, with Ebitda up 20% QoQ to Rs 15.2 billion on higher London Metal Exchange prices.

Consolidated net debt declined Rs 42 billion QoQ to Rs 538 billion (Rs 623 billion in Q1 FY21) and net debt to-Ebitda declined to 3.1 times (3.8 times in Q1 FY21).

We broadly maintain our FY21E/FY22E estimate and reiterate the company as our top non-ferrous pick.

We expect 26% earning per share compound annual growth rate over FY21-23E driven by better margin and continued deleveraging.

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