The brokerage house said a sharp fall in aluminum prices due to subdued global demand and pick-up in aluminum production from China, further adversely impacted LME prices. It added that the demand environment in the CAN segment is expected to remain strong, given the cyclical nature and regional supply constraints.
It further added that the company has also enhanced its coal security by winning the Meenakshi and Chakala coal mines in the recent auctions. In addition, Novelis announced a strategic capital investment of USD 3.4 billion towards transformational organic growth over the next five years by stimulating demand trends.
Axis Securities also has ‘buy’ call
Industries with a target price of Rs 510. For Centrum Broking, Hindalco price is Rs 573. Hindalco is expected to grow rapidly in future on the back of recovery in the market, positive macro, better operational efficiencies and growth in global demand. Also, the company is investing heavily to fuel growth.
The brokerage firm has reiterated the ‘Buy’ rating on the stock with a rolled forward target price of Rs 466.
While Motilal Oswal said Novelis remains a bright spot in Hindalco’s consolidated profitability, concerns over its Indian business are transient. “We cut our FY23 EBITDA/PAT estimate by 16-22 per cent, at the consolidated level, driven by 28 per cent reduction in India EBITDA due to higher coal costs. We expect the coal crisis to be the next one-to-one. Will end in one-two quarters,” it added.
The brokerage house has maintained a ‘buy’ rating with a SOTP-based target price of Rs 555 per share. An extended coal crisis remains the major risk, it said.
Hindalco is feeling the potential pinch of aluminum returning to surplus (from deficit) during FY 2013/24E, as well as trading instrument facing rising interest rate environment and possible compression in Novelis margins. Huh. He has placed a ‘Reduce’ call on Hindalco Industries with a target price of Rs 295.
Hindalco’s consolidated profit doubled to Rs 3,851 crore in the March quarter, a record high for any quarter as compared to Rs 1,928 crore in the same quarter last year. Consolidated revenue for the fourth quarter grew 38 per cent to Rs 55,764 crore as against Rs 40,507 crore in the same quarter last year.
Promoters held 34.64 per cent stake in the company as of March 31, 2022, while FIIs held 28.85 per cent, DIIs held 19.22 per cent.
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