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Motilal Oswal Report
Hindalco Industries Ltd.'s Q1 consolidated performance was in line with expectations, driven by favorable pricing and lower input costs. Novelis also witnessed decent performance. Going forward, the cost of production in the aluminum business is expected to be under control, which would keep margins strong.
Novelis would continue to see margin improvement across FY25 and FY26. The ongoing capex in Novelis would establish Hindalco as the global leader in beverage cans and automotive FRP segments. The capex is likely to be completed within the revised timeline, and there will be no further changes in cost estimates.
At current market price, the stock trades at six times enterprise value/Ebitda and 1.3 times price/book on FY26E.
We broadly maintain our estimates. We reiterate our Buy rating on Hindalco with a revised target price of Rs 750 (based on SOTP valuation).
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