27 May , 2022 By : Kanchan Joshi
Shares of Hindalco Industries surged over 2% to Rs416 apiece on the BSE after Aditya Birla Group firm posted a 99.7% rise in its consolidated net profit at Rs3,851 crore for the quarter ended March, 2022. Its consolidated revenue from operations increased to Rs55,764 crore as against Rs40,507 crore in the same quarter of FY21.
“The management’s guidance on Novelis is positive. Its long-term outlook is also encouraging. While Novelis continues to remain the bright spot in Hindalco consolidated profitability, the concerns on its India business are transitory," brokerage Motilal Oswal stated.
The brokerage has maintained a Buy rating on Hindalco shares with a SoTP-based target price of Rs555 apiece. An extended coal crisis remains the key risk, as per Motilal Oswal.
Led by meaningful correction in valuations and stable performance in both India and Novelis operations, brokerage Prabhudas Lilladher has upgraded the metal stock to Accumulate with target price of Rs545.
The Indian aluminium business posted a robust Ebitda growth of 123% to Rs4,050 crore, with Ebitda margins of 41%. The company attributed the same to favourable macros, higher volumes, better operational efficiencies, and improved performance of downstream business offset by higher input costs.
“Novelis’ margins are expected to cross US$500/t in Q1FY23 as last quarter was impacted due to production and logistics related one-time issues in North America. Demand for beverage cans and speciality products remained strong with tight market conditions. However, margins would be lower for next couple of quarters due to high energy costs," the brokerage added.
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