Accumulate Hindalco Industries; target of Rs 245: Prabhudas Lilladher

Prabhudas Lilladher's research report on Hindalco Industries

Hindalco (HNDL) reported Q3FY19 earnings in line with estimates. Aluminium (AL) operations posted earnings ahead of expectation on the back of better than expected realisations. In the midst of depressed LME prices and severe shortage of domestic coal, AL operations posted 8% YoY (↓5% QoQ) growth in EBITDA against our estimate of flat growth YoY (↓12% QoQ). While, Copper (Cu) operations disappointed due to weaker than expected premiums and lower by-product volumes/realisations. We expect improved margins in Cu operations with the ramp-up of high margin CC rods capacity.

Outlook

Backed by strong business model and attractive valuations, we maintain Accumulate with TP of Rs245, EV/EBITDA of 6x FY20E.

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Read More First Published on Feb 18, 2019 02:11 pm