Hindalco Industries Limited - Novelis overshadows standalone disappointment - Emkay

Reco: BUY
CMP: Rs 120
Target Price: Rs 151

- Standalone performance disappointing with PAT at Rs 4.2 bn, down 34% on both YoY and QoQ. This could have been lower without higher other income of Rs 3 bn, up 88% QoQ.

- Volume for both aluminium and copper remained lower on shutdowns affecting domestic performance; 440 bps rise in other expenses (Rs 6.2 bn) to revenue weighed on margins.

- Novelis surprised positively with adj EBITDA of US$259 mn and adj EBITDA/ tonne of US$359 (US$331 for Q4FY12); rolled product shipment up 3% QoQ to 722 kt (beverage can 432 kt).

- Despite disappointing standalone nos, Novelis gives us confidence and we keep our FY14 estimates unchanged; Our SOTP based target price remains Rs 151/ share; Buy.

Source : Equity Bulls

Keywords