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Hindalco Industries share hits all-time high on Q3 earnings, what brokerages say

Hindalco stock touched a fresh high of Rs 297.30, rising 6.42% on BSE. Market cap of the firm rose to Rs 66,153 crore

twitter-logoBusinessToday.In | February 11, 2021 | Updated 16:23 IST
Hindalco Industries share hits all-time high after Q3 net profit rises 77%
Hindalco share has gained 52% in one year and risen 22.33% since the beginning of this year.

Hindalco Industries share zoomed to its fresh all-time high today after the firm reported a 77 per cent year-on-year (YoY) rise in Q3 net profit. Hindalco stock touched a fresh high of Rs 297.30, rising 6.42% on BSE. Market cap of the firm rose to Rs 66,153 crore.

The stock has gained 3.7% in the last 2 days. Hindalco Industries share stands higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. Hindalco share has gained 52% in one year and risen 22.33% since the beginning of this year.

Later, the stock closed 5.78% or Rs 16.15 higher at Rs 295.50.

The metals flagship company of Aditya Birla Group reported a consolidated profit after tax (PAT) at Rs 1,877 crore in Q3.  On a sequential basis, net profit rose 385 per cent.

The earnings were driven by a strong performance by Novelis and India Aluminium business, supported by higher volumes and better product mix, lower input costs, stability in operations and cost saving actions.

Consolidated revenue from operations surged 20 per cent to Rs 34,958 crore in Q3 FY21 compared to Rs 29,197 crore in the same period last year.

Consolidated business EBITDA rose by 40 per cent YOY to Rs 5,242 crore compared to Rs 3,733 crore in the year ago period, driven by the best-ever quarterly performance by Novelis and a sharp recovery in all relevant markets in India Aluminium business.

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India business PAT stood at Rs 495 crore, up 90 per cent YoY and 51 per cent sequentially. Aluminium India business EBITDA was at Rs 1,323 crore, up 27% YoY, while EBITDA margin improved to 25 per cent, up 593 bps YoY.

Edelweiss said Hindalco's Q3FY21 consolidated EBITDA of Rs 5,200 crore came in ahead of our estimates owing  to the copper division's performance.

Going  ahead,  we  expect  focus  on margin-accretive  projects  and  cost efficiencies from Utkal expansion to drive growth. The company plans to unveil its capital allocation strategy shortly. Maintain 'BUY' with an unchanged target price of Rs 308 (6x Q1FY23E EBITDA).

Motilal Oswal said that the stock trades at 4.9x EV/EBITDA and 7.7x P/E on a FY22E basis. "We value it at INR325/share on a SoTP basis. Reiterate Buy with a target price of Rs 325," it said.

"We broadly maintain our FY21E/FY22E estimate and reiterate HNDL as our top non-ferrous pick. We expect 26% EPS CAGR over FY21-23E driven by better margin and continued deleveraging," the brokerage added.

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