Prabhudas Lilladher has given Buy recommendation for Hindalco Industries with a target price of Rs. 360 in its research report issued on Feb 23, 2021
Prabhudas Lilladher’s research report on Hindalco Industries
Hindalco (HNDL) hosted analyst meet to explain its capital allocation policy for next five years. Management reiterated its two-pronged strategy to focus on downstream capacity expansion in India and debt reduction in Novelis. Strong demand across product segments (except Aerospace) and tight supplies would help Novelis’ margins to sustain within management’s guided range of US$480-500/t despite headwinds on scrap spreads. Debt gearing would come down significantly over next couple of years on back of stable earnings and lean capex.
We reiterate BUY with revised TP of Rs360 (earlier Rs305) as we increase EV/EBITDA multiple to 6.7x (earlier 6.0x) FY22e in wake of steady outlook on both Novelis and India operations and comfortable B/S.