Dated: 1st July 2021

HINDALCO INDUSTRIES (HNDL) – BUY

Company Update
Current Market Price (CMP) Target Price
Rs.372 Rs.500

Our fair value of Rs500 offers upside of 34.4% from current market price.

Rationale:
• Attractively placed amid strong aluminum fundamentals and robust demand in the
FRP segment at Novelis.
• India business should see margin expansion from elevated aluminum prices.
• Deleveraging to continue with strong earnings and measured capex.
• We value HNDL domestic business at 5x and Novelis at 7x Mar’23E EBITDA
(Earnings Before Interest, Tax, Depreciation and Amortisation) .

Company update:
Positives:
• Expect Novelis to deliver at the upper end of its margin guidance in 1HFY22E
(US$500/ton).
• Strong metal prices should elevate aluminum EBITDA to US$814/ton in FY22E.
• We expect global aluminum markets to enter into a deficit from CY22E on strong
demand and limited capacity additions.

Negatives:
• We expect marginal volume impact in Novelis auto segment in 1HFY22E.
Click here To read the detailed report

` `

This is a synopsis of the Research report issued by Kotak Securities Limited. This is not a comprehensive report
and before taking any investment decision we request you to refer the detailed report including disclaimers by
clicking here: https://www.kotaksecurities.com/ksweb/ResearchCall/Fundamental. Further, the recipient of this
material should take their own professional advice before investing.
Holding Period: 12 Months / Disclaimer: http://bit.ly/2n5AxIE