ICICI Direct Places Buy On Aditya Birla Group Stock, Jumps 197% In 3 Yrs, Board Recommends Dividend

Brokerage firm ICICI Direct in its recent equity report on Hindalco Industries Ltd., an Aditya Birla Group company, has placed a Buy rating with a target price of Rs. 485/share. The broking firm sees a decent upside of upto 18% from its current level in the estimated period of 12 months, according to the given target price. It is a large-cap metal sector company having a market capitalisation of Rs. 92,730.48 crore.

The company in their Board meeting held on Wednesday, May 24, 2023, recommended a dividend of Rs. 3/share of Re. 1 each for the financial year 2022-23.

Recommended Dividend

The company in an exchange filing has said, "recommended a dividend of Rs. 3 /- per equity share of Re. 1/- each for the year ended March 31, 2023, subject to the approval of Shareholders at the ensuing Annual General Meeting of the Company."

Q4FY23 Results

According to the brokerage firm, Hindalco's consolidated operations reported a steady operational performance. The Indian business reported a healthy operational performance for Q4FY23 while Novelis' performance was broadly in line with our estimates. For Q4FY23, the India business reported a topline of Rs. 20444 crore, up 4% YoY and 5% QoQ (our estimate of Rs. 19423 crore). For Q4FY23, Indian business EBITDA (business segment EBITDA) was at Rs. 2902 crore, up 27% QoQ (our estimate of Rs. 2510 crore).

Indian aluminium business EBITDA was at Rs. 2304 crore, higher than our estimate of Rs. 1958 crore. Indian copper business EBITDA was at Rs. 598 crore, up 55% YoY and 10% QoQ, higher than our estimate of Rs. 552 crore. Ensuing PAT of Hindalco's India business for Q4FY23 was at Rs. 1172 crore, higher than our estimate of Rs. 917 crore. For the quarter, Novelis reported adjusted EBITDA of US$403 million, broadly in line with our estimate of US$404 million. Novelis reported adjusted EBITDA/tonne of US$431/tonne (our estimate US$425/tonne), while shipments for the quarter were at 936 KT (our estimate of 950 KT).

Buy for a target price of Rs. 419/share

According to brokerage, Hindalco's share price has given a return of ~201% in the last three years (from ~Rs. 139 in May 2020 to ~Rs. 419 in May 2023). "We maintain our BUY rating on the stock. We value Hindalco at Rs. 485, based on SoTP valuation," the brokerage has said.

Stock Outlook - Current Market Price, 52 Week High/Low, & Returns

The stock of Hindalco is currently trading 1.79% down at Rs. 412.40 apiece. Its 52 week low is Rs. 308.95 apiece as on 20th June 2022 and 52-week high is Rs. 504 apiece as on 18 January 2023.

The stock surges 0.52% in the past 1 week and declined 5.42% in the past 1 month. It fell 1.03% in the past 1 year. In 3 years, it jumped 197.05% positive return. In 5 years, it has given 73.23% positive return.

About - Hindalco Industries Ltd.

Hindalco is the world's largest aluminium company by revenues and a major player in copper. Hindalco is one of Asia's largest producers of primary aluminium. Novelis has leveraged its extensive recycling footprint and favourable market conditions to increase its recycled content to 61% in FY21.

Disclaimer - The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.