Hindalco share price volatile: Should you Buy, Sell or Hold the stock?
Hindalco Industries Ltd share price gained more than 1% in morning trades on Wednesday, however was trading the red thereafter. Hindalco share price had seen sharp correction of more than 12% on Tuesday. Hindalco had posted its December quarter performance on Tuesday.
Hindalco's consolidated net profit at ₹2,331 crore, rose 71% YoY. The consolidated earnings before interest tax depreciation and amortisation (Ebitda) at ₹6,322 crore also was up 61% YoY., helped by declining input costs and strong performance in all verticals. Hindalco's US subsidiary Novelis while saw adjusted Ebitda per ton at $499, rise 33% YoY, Aluminium Upstream Ebitda at ₹2,443 crore, also was up 54% YoY.
Copper segment continues its strong performance with Ebitda at ₹656 crore, up 20% YoY. However it was the rise in Capex outlay for its key growth project—greenfield expansion in North America—by 65% to $4.1 billion (around $2.5 billion earlier) that impacted street sentiments as the stock price ended 12.43% down on Tuesday. Here's what Brokerages say about Hindalco Hindalco's 3Q Ebitda rose 68% YoY and 7% sequentially which was in line with Jefferies estimates.
Novelis expects sequentially better Q4FY24 and India aluminum margins should hold up too. Jefferies has fine-tune estimates and expect 9-13% Ebitda and Earnings per share CAGR (compound annual growth rate) over FY24-26. The big cost escalation at Novelis' 600ktpa project has deteriorated cashflow outlook and will impact project return ratios, said Jefferies analysts.
However, Hindalco valuations at 5.6x FY25Enterprise Value to Ebitda and 1.0x FY25 estimated Price to Book value are reasonable. They retain Buy, ratings on Hindalco but prefer COAL India over Hindalco. Also read- Zee
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