Buy Hindalco Industries; target of Rs 315: Prabhudas Lilladher
Prabhudas Lilladher’s research report on Hindalco Industries
Hindalco (HNDL) reported Q2FY18 EBITDA in?line?with our estimates on the back of higher than expected earnings in Copper (Cu) business, offsetting lower earnings in Aluminium (Al) operations. Aluminium (Al) operation’s margins quality and trajectory would continue to strengthen (despite high base) on the back of optimisation of linkage/captive coal mix, de?risking of product basket with capacity addition in margin rich value added products and rationalisation of freight cost.
Outlook on Al prices improved significantly on the back of visible production cuts in China and stable demand. Given the quality domestic operations and stable outlook on Novelis, we reiterate BUY with TP of Rs315, EV/EBITDA of 7x FY19E.
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