Hindalco Industries - Capacity Expansion, Sizing Downstream To Drive Margins; Anand Rathi Initiates With A Buy

Anand Rathi Report

One of the largest non-ferrous manufacturers globally, Hindalco Industries Ltd. offers many products and solutions for packaging, automobiles, construction, aerospace and other industries. Its multi-regional and multi-product capacity expansion underway, we believe, would augment the share of added products and enhance its recycling abilities, strengthen its aluminium circularity potential.

Considering its strong focus on expanding capacity, integrating raw materials, enhancing aluminium recyclability and raising the share of VAPs, we initiate coverage on the stock with a Buy and a sum-of-parts target price of Rs 850/share.

Risks:

Fluctuations in non-ferrous metals on the London Metal Exchange, slowing demand, delay and cost over-runs in project execution, scrap unavailable.

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