Hindalco Industries shares are in focus on February 14 after it clocked a 60% jump in Q3 net profit. Here are 4 reasons why JPMorgan continues to be ‘Overweight’ on the stock-
JP Morgan ‘Overweight’ on Hindalco Industries
The brokerage firm JP Morgan in a research report said that it maintains an ‘Overweight’ call on the stock, with a target price of Rs 670. The reason behind this was the domestic business’ EBITDA beat its estimates. The operating profit was helped by lower costs and better copper business performance. The steel-to-aluminium maker’s operating profit or Earnings before interest, taxation, depreciation, and amortisation (EBITDA) came in at Rs 8,108 crore, an increase of 28% year-on-year.
Domestic performance in Q3
The company’s Indian business’ net profit surged 134% YoY to Rs 2,885 crore in Q3 FY25. Revenues grew 19% YoY to Rs 24,618 crore in Q3 FY25, while EBITDA jumped 69% to Rs 4,773 crore for the quarter under review.
Hindalco’s strong Q3
The company posted a jump of 60% year-on-year (YoY)in its consolidated net profit of the third quarter FY25, standing at Rs 3,735 crore, as against Rs 2,331 crore posted in the same period a year ago. The revenue from operations in Q3 FY25 stood at Rs 58,390 crore, up 11% from Rs 52,808 crore reported in the corresponding quarter of the last financial year. Its total income for Q3 rose to Rs 58,899 crore compared to Rs 53,088 crore a year ago.
Novelis performance set to revive in Q4
Most analysts believe that Novelis will see a limited impact of the US Tariff on steel and aluminium. This is because Novelis is ramping up its US facilities. That apart, despite elevated scrap prices, the Novelis management has guided for Q4FY25 EBITDA/t of $490–500/t and hopes to sustain in FY26. Other brokerage houses like Nuvama have also given a thumbs up to the Novelis management’s guidance for earnings revival.
Hindalco in Q2
Its standalone net profit jumped 123% YoY to Rs 1,891 crore in the second quarter of FY25, compared to Rs 847 crore reported in the same quarter of the previous financial year. Its revenue from operations increased 8% YoY to Rs 22,262 crore in Q2 FY25. Novelis’ revenue for the quarter stood at $4.3 billion, an increase of 5% YoY, driven by higher average aluminium prices.
Hindalco Industries Vs Nifty 50
The share price of Hindalco Industries has risen 1.2% in the past five trading days. It has given a return of 2.3% in the past one month. However, it has fallen by 2.7% in the last six months. It has given a return of 19% in the previous one year.
To compare, the benchmark index, Nifty 50 has wiped out 2.4% of investors’ wealth in the last five trading days. It has declined by 0.6% in the last one month and 4.6% in the previous six months. However, the index has given a return of 5.5% in the last one year.