ICICI Securities gives 'buy' tag to this metal stock
According to ICICI Securities report, Hindalco Industries shares are expected to go up to ₹550 in long-term
PremiumMultibagger stock: Metal stocks have delivered multibagger return to shareholders in last one year. Hindalco Industries is one such stock. According to ICICI Securities report, Hindalco Industries shares are expected to further go up to ₹550 in long-term from its current share price level of around ₹460 apiece.
Highlighting the reason for being bullish on this multibagger stock, ICICI Securities says, "Higher working capital requirement created a road bump in the declining debt trajectory, given the converter nature of Copper India and Novelis for Q1FY22. Q2FY22 performance was better than expected with net debt reducing around ₹39bn QoQ."
The brokerage went on to add that EBITDA performance was also much better than expected with reported consolidated EBITDA at ₹75bn as against ₹69bn expected. The surprise has been driven by the Aluminium operations on the back of better-than-expected premiums.
"Cost performance for the quarter was as guided before (up 5 per cent QoQ). Management continues to focus on downstream execution with value-added mix expected to double over the next 3-5 years (from 35-40 per cent of the current product mix). There were mentions of incremental hot mill capex in Novelis in the call, more details will emerge later. The strategic vibes remain as consistent as ever," the brokerage said.
Highlighting key developments in the quarter, ICICI Securities says, "500kte expansion project in Utkal Alumina started commercial production in Q2FY22 and has already achieved rated capacity, taking its total capacity to 2.1mtpa. Hindalco signed a definitive agreement with Polycab to acquire its 100 per cent equity stake in Ryker Base, which has a 225ktpa cast and rolled copper wire rods manufacturing facility."
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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