DAM Capital initiates coverage on Hindalco with buy rating, sees 37% upside
DAM Capital initiated coverage on Hindalco with a 'Buy' rating and target price of Rs 905, which indicates an upside potential of 37% from the previous day's closing price of Rs 660 apiece.
In its coverage initiation, DAM Capital emphasized the opportunities within the aluminium sector, expressing optimism about future aluminium prices and predicting deficits ahead. Meanwhile, the brokerage highlighted Hindalco's strengths, noting, «Hindalco's India aluminium business is strong, with stable copper operations.»
DAM Capital also pointed to robust demand from China, observing that «China's aluminium demand remains strong, with imports on the rise.» Additionally, the brokerage commended the performance of Hindalco's subsidiary, Novelis, stating, «Novelis is improving volumes and profitability, inching towards $600/t EBITDA.» It also mentioned a positive long-term outlook for the market, noting that «long-term sheet demand trends remain positive.»
At 10:43 am, the scrip was trading 1.5% higher at Rs 670.5 on BSE. The stock has also surged 10% year-to-date, while it has risen 45% in the past one year.
Meanwhile, in today's trading session, Hindalco's shares also rallied nearly 2% to Rs 672 as the firm plans to spend nearly $7 billion on capital expenditure over the next three to five years, including that at its US-based subsidiary Novelis Inc.
“We are in the midst of an ambitious investment cycle and are on course to execute our strategic capex of $4.9 billion for Novelis and $2 billion for Hindalco India over the
