GEPL Capital has put a buy call Hindalco Industries and has recommended the stock with a target price of Rs 160.
"With the ongoing expansion plans, we estimate Hindalco to record EBITDA CAGR of around 16% over FY12-14E as the Utkal, Mahan and Aditya Aluminium projects get commissioned. However, we expect its balance sheet to continue to remain highly leveraged as we estimate its capex to remain at around 80 bn per year for the next 2 years. We expect RoCE at 11.8% in FY14E from 7.2% in FY12," the research firm has pointed out.
It further adds, "In last one year, Hindalco has significantly underperformed the benchmark indices for numerous reasons like project delays; issues on allocation of mahan block and lower aluminium prices globally. From its present level, possibility of downside in aluminum prices looks remote as it is below global cost curve. After getting done with legal hurdles and putting projects back on track we believe that recovery would continue going ahead and better performance from Novelis will act as a catalyst for further improvement in FY14. We recommend a BUY rating on the stock with target price of Rs 160. At our target of Rs 160, the exit EV/EBITDA comes at 5.6x, which is lower than other international players where the average EV/EBITDA multiple stands at 6.5x."
Sunidhi Securities is bullish on Visaka Industries (VIL) and has recommended buy rating on the stock with a target price of Rs 165 in its December 19, 2012 research report.
At the CMP of Rs 126, the share is trading at a P/E of 2.9x on FY13E & 2.4x on FY14E. We recommend BUY with a target price of Rs 165 in the medium term," says Sunidhi Securities research report.