Buy Hindalco Industries, target price Rs 535: JM Financial

JM Financial has buy call on Hindalco Industries with a target price of Rs 535. The current market price of Hindalco Industries is Rs 401.

Hindalco Industries, incorporated in the year 1958, is a Large Cap company (having a market cap of Rs 91438.35 Crore) operating in Metals - Non Ferrous sector.

Hindalco Industries key Products/Revenue Segments include Aluminium, Other Operating Revenue, Sale of services for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 56209.00 Crore, up 5.03 % from last quarter Total Income of Rs 53517.00 Crore and up .27 % from last year same quarter Total Income of Rs 56057.00 Crore. Company has reported net profit after tax of Rs 2409.00 Crore in latest quarter.

The company’s top management includes Mr.Kumar Mangalam Birla, Mr.Sudhir Mital, Mr.Vikas Balia, Ms.Alka Bharucha, Mr.Yazdi Piroj Dandiwala, Mr.Kailash Nath Bhandari, Mr.Askaran Agarwala, Mrs.Rajashree Birla, Mr.Praveen Kumar Maheshwari, Mr.Satish Pai, Mr.Anant Maheshwari. Company has Price Waterhouse & Co Chartered Accountants LLP as its auditors. As on 31-12-2022, the company has a total of 225 Crore shares outstanding.

Investment Rationale
Despite near term uncertainty on account of de-stocking in beverage can segment, long term outlook for Hindalco continues to remain buoyant given a) Novelis – maintaining medium term EBITDA/t guidance of ~US$525 (expected by 4QFY24) b) resilient performance by India aluminium operations c) enhanced coal security post acquisition of Meenakshi and Chakla coal mines and d) growth capex to augment capacity in downstream business. Hindalco, given ~70%+ steady/strong EBITDA being non-LME linked, remains our preferred play in the metal space.

Promoter/FII Holdings
Promoters held 34.64 per cent stake in the company as of 31-Dec-2022, while FIIs owned 25.66 per cent, DIIs 26.35 per cent.