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Hindalco shares extend losses after Q4 results: what’s worrying investors

Hindalco Industries reported a 37 per cent year-on-year decline in consolidated net profit or profit after tax (PAT) at Rs 2,411 crore, the metals company said in its regulatory filing.

Hindalco Industries shares declined for the second day in a row amid weak Q4 results on a year-on-year basis. The stock, which was among the top Nifty losers on the BSE during Wednesday’s trading session, slipped 2 per cent to hit the day’s low of Rs 399.

Hindalco shares

Most brokerages are bullish on the Aditya Birla Group company’s stock after it reported better-than-expected earnings in the March quarter of last fiscal. He sees an upside potential of up to 30 per cent in Hindalco’s share price.

Hindalco Q4 Results

In its regulatory filing, Hindalco said the aluminum producer reported a 37 per cent decline in consolidated net profit or profit after tax (PAT). However, the fourth quarter profit grew by 77 per cent on a sequential basis. Meanwhile, Hindalco’s consolidated revenue stood at Rs 55,857 crore, which was unchanged on a year-on-year basis but was up 5 percent sequentially, the company said in its earnings release. Analysts had estimated the aluminum maker’s consolidated revenue at Rs 52,309 crore in Q4.

Hindalco dividend 2023

The board of directors of the company in its meeting held on Wednesday recommended a dividend of Rs 3 per equity share of Re 1 each for the year ended March 31, 2023, subject to the approval of the shareholders at the forthcoming Annual General Meeting of Hindalco.

Should you buy Hindalco shares?

Global brokerage firm CLSA has maintained ‘buy’ call on Hindalco shares after outperforming earnings and raised the revised target price to Rs 530 per share from Rs 550 per share.

While Kotak Institutional Equities believes Hindalco’s Q4 earnings were largely in line with estimates, driven by sequential margin expansion in aluminum and copper divisions. It maintained ‘Add’ call with a target price of Rs 455. The stock is trading at a cheap 5.4X EV/EBITDA FY25E.

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