Hindalco Q1 2024 Profit Declines: Brokerage Firms Present Stock Insights
Hindalco Industries Limited, a prominent player in the metal industry, reported a Q1 FY2024 profit of Rs 600 crore, slightly surpassing the estimated figure of Rs 588 crore. This figure marks a significant contrast from the Q1 FY23 profit of Rs 1,448 crore. Simultaneously, the company’s Q1 FY2024 income recorded Rs 19,904 crore, impressively exceeding the anticipated Rs 16,948 crore. This achievement is a noteworthy improvement from the Q1 FY23 income of Rs 19,518 crore.
In the wake of these financial results, leading brokerage firms have presented their outlooks on the stock. Notably, Jefferies and CLSA advocate a bullish perspective, while Macquarie maintains an “outperform” rating.
CLSA, echoing positivity, issues a “buy” rating for Hindalco. The firm sets a share target of Rs 530. The assessment states that the first quarter EBITDA aligns well with expectations. The temporary escalation in debt is attributed to a seasonal rise in working capital. Although integrated aluminum EBITDA/t experienced a decline during the period due to lower costs, this was partially counterbalanced by other factors. Hindalco anticipates a 3% reduction in costs during Q2FY24, attributing it to the normalization of coal mix. Moreover, the commissioning of captive blocks is expected to drive structural cost reduction.
Macquarie follows suit with an “outperform” rating and a share target of Rs 516. It highlights that the Q1 FY2024 EBITDA performance exceeded estimates, with a pleasant surprise from the copper segment. The performance of aluminum EBITDA is in line with expectations. Additionally, the downstream segment’s strong performance has contributed to the robust aluminum EBITDA figures.
These insights from brokerage firms provide investors with valuable guidance on Hindalco’s stock performance and future prospects based on its Q1 results.
