Hindalco - Q2FY21 Result Update - ICICI Direct

Hindalco's India business posted a healthy set of operational numbers in Q2FY21. Topline came in line with our estimates while EBITDA and PAT came in higher than our estimates. The topline of Hindalco's India business was at Rs. 9565 crore (up 28% QoQ, down 4% YoY), in line with our estimate of Rs. 9621 crore. EBITDA of Hindalco's India business came in at Rs. 1275 crore (up 14% YoY, 43% QoQ, higher than our estimate of Rs. 1185 crore). EBITDA margin came in at 13.3% (up 210 bps YoY, 130 bps QoQ), higher than our estimate of 12.3%. Ensuing PAT for India business was at Rs. 327 crore (up 86% YoY, 289% QoQ), higher than our estimate of Rs. 240 crore.

Valuation & Outlook

Going forward, the free cash flow generated by the company will be primarily utilised to repay its debt. Over the medium term horizon, for Novelis the company is aiming to reach a net debt to EBITDA level of below 3x (3.7x currently) while for Indian operations, the company plans to reach a net debt level of Rs. 12000 crore, which is currently at ~Rs. 17000 crore (excluding working capital). We value the stock on SoTP basis and arrive at a target price of Rs. 240. We maintaining BUY recommendation on the stock.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_Hindalco_Q2FY21.pdf

Shares of HINDALCO INDUSTRIES LTD. was last trading in BSE at Rs.209.55 as compared to the previous close of Rs. 210.55. The total number of shares traded during the day was 126090 in over 1624 trades.

The stock hit an intraday high of Rs. 212.4 and intraday low of 207.15. The net turnover during the day was Rs. 26546826.

Source : Equity Bulls

Keywords