Stable Cash Flow, Reduced Financial Leverage to Drive Growth: Axis Securities Launches Hedge

BQ Blue’s special research section brings together in-depth and quality research reports on stocks and the economy from top Indian brokers, asset managers and research agencies. These reports provide BloombergQuint subscribers with the opportunity to deepen their understanding of businesses, industries, and the economy.

We start coverage on Hindalco Industries Ltd. on a positive note as the stock is currently trading at 5.4x Enterprise / Ebitda of 12 MF and looks cheap compared to its long-term average of 6.5x Enterprise / Ebitda.

While aluminum prices have seen a noticeable price increase since the start of the year, mainly due to major disruptions caused by production restrictions in China, we believe Hindalco’s outlook remains strong, London Metal Exchange price remaining above $ 2,500 / tonne.

China continues its ambitious decarbonization plan and has imposed strict limits on carbon-intensive industries. This confirms our assumption that the country will stick to its smelting capacity cap of 45 million tonnes per year.

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