Motilal Oswal has given Buy recommendation for Hindalco recommended buy rating on the stock with a target price of Rs 750 in its research with a target price of Rs. 750 in its research report issued on Mar 31, 2022

Motilal Oswal’s research report on Hindalco

The management sees strong demand for aluminum from major segments like Beverage Can, Automotive Body Sheet, Specialties, and Aerospace. The supply disruption in aluminum will deepen the deficit and result in higher LME prices through FY23 and FY24. HNDL announced a strong growth capex pipeline of USD7.9b (including optional capex) over the next five years in both Novelis and its parent entity to deploy the strong cash flow expected in both companies. It expects to deploy ~75% of the FCF (post sustenance capex and working capital).

Outlook

We raise our FY22/FY23 EBITDA estimate by 2.4%/6.6%, led by a 0.6%/10% increase in LME aluminum prices and raise our SoTP-based TP to INR750/share (from INR700 earlier). The key risk to our call is a slowdown in China, resulting in a correction in aluminum prices.

More Info

At 13:33 hrs Hindalco Industries was quoting at Rs 571.55, down Rs 28.25, or 4.71 percent.

It has touched an intraday high of Rs 599.65 and an intraday low of Rs 571.50.

It was trading with volumes of 415,516 shares, compared to its thirty day average of 468,223 shares, a decrease of -11.26 percent.

In the previous trading session, the share closed down 4.94 percent or Rs 31.20 at Rs 599.80.

The share touched its 52-week high Rs 636.00 and 52-week low Rs 321.00 on 29 March, 2022 and 31 March, 2021, respectively.

Currently, it is trading 10.13 percent below its 52-week high and 78.05 percent above its 52-week low.

Market capitalisation stands at Rs 128,437.16 crore.

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