14th February, 2025
INVESTMENT
IDEAS
HINDALCO LIMITED CMP: 605.80 Target Price: 722 Upside: 19%
VALUE PARAMETERS Investment Rationale:
Face Value (Rs.) 1.00 Ÿ Hindalco Industries, the metals flagship of the Aditya Birla Group, is the
world's largest aluminium rolling and recycling company, a major copper
52 Week High/Low 772.00/499.05
player, and one of Asia's largest producers of primary aluminium. In India,
M.Cap (Rs. in Cr.) 136136.98 Hindalco's aluminium manufacturing units cover the complete value chain,
EPS (Rs.) 58.09 from bauxite mining, alumina refining, coal mining, captive power
generation and aluminium smelting, to downstream value-addition of
P/E Ratio (times) 10.43
aluminium rolling, extruding, and foil making.
P/B Ratio (times) 1.18
Ÿ• The company has delivered robust consolidated results in the third quarter
Dividend Yield (%) 0.57
despite global uncertainties, driven by an excellent performance of its India
Stock Exchange BSE business. The Aluminium India Upstream business achieved record
quarterly EBITDA, with industry-leading margins of 42%. The downstream
segment experienced consistent growth posting a 36% increase in EBITDA.
SHAREHOLDING PATTERN The Copper business delivered a robust 18% growth in EBITDA. Moreover,
the business marked a significant milestone by achieving the ‘Copper Mark-
JDDS’ for its responsible and sustainable production practices.
Ÿ• Novelis’ Its subsidiary, revenue stood at $4.1 billion, mainly driven by higher
average aluminum prices with total rolled product shipments of 904
kilotonnes largely comparable to the prior year period. Adjusted EBITDA at
$367 million, down 19% due to higher aluminum scrap prices and
unfavourable product mix. According to the management of the company,
Novelis continues to focus on operational and cost efficiency initiatives in the
face of current pressures on scrap pricing.
Ÿ• During the quarter, the company secured vital resources for its India
P/BV CHART upstream business, strengthening its global cost leadership. Key growth
1200.00 initiatives, including the alumina refinery, aluminium smelter expansion,
copper smelter expansion, and the FRP project, are progressing as planned.
1000.00
800.00 Ÿ• During Q3FY25, It has reported 11% rise in consolidated revenue at Rs
58,390 crore in Q3FY25 as against Rs 52,808 crore in Q3FY24 and net profit
600.00
of ₹3,735 crore, up 60%, driven by a strong operational performance by the
400.00
India business. EBITDA at ₹8,108 crore, up 28% and margin improved to
200.00
13% vs 11.1%. Net Debt to EBITDA at 1.33x as of December 31, 2024.
0.00
Ÿ• On segmental front, Aluminium Upstream EBITDA stood at an all-time high
6-Jul-23
8-Jan-24
5-Sep-23
11-Jul-24
23-Jun-20
24-Jun-21
29-Jun-22
13-Jan-25
11-Sep-24
20-Aug-20
18-Dec-20
25-Aug-21
27-Dec-21
30-Aug-22
30-Dec-22
14-Feb-20
18-Feb-21
24-Feb-22
1-Nov-22
7-Nov-23
1-Mar-23
6-Mar-24
22-Apr-20
20-Oct-20
26-Apr-21
26-Oct-21
29-Apr-22
11-Nov-24
8-May-23
13-May-24
of ₹4,222 crore, up 73%, supported by lower input costs. Copper business
recorded an EBITDA of ₹777 crore, up by 18%, backed by continued strong
0.35 0.90 1.45 2.00 Close Price
domestic sales and higher by-product realisations.
ŸRisk
FINANCIAL PERFORMANCE (Rs.in Cr.)
Ÿ• Sizeable capex and associated risks
ACTUAL ESTIMATE
Ÿ• Volatility in raw material prices
FY Mar-24 FY Mar-25 FY Mar-26
REVENUE 215962.00 235365.89 243491.23 Valuation
EBITDA 24257.00 31079.91 31499.18 The company is in a strong position for the next phase of transformative growth,
supported by its robust balance sheet. A stellar Q3 FY25 performance, fueled by
EBIT 16736.00 23214.16 22976.57
record aluminium earnings, higher copper profits, and the strategic coal mine
NET INCOME 10134.00 14867.10 14901.36 acquisition, signals promising prospects. With sustained demand for aluminium,
EPS 45.56 66.52 67.26 copper, and a focus on sustainability, the company is well-positioned for long-
term success, driven by operational efficiency and market expansion. Thus, it is
BVPS 474.51 524.26 587.11 expected that the stock will see a price target of Rs.722 in 8 to 10 months’ time
RoE 10.09% 13.20% 11.98% frame on a 2 year’s average P/BV of 1.23x and FY26 (E) BVPS of Rs.587.11.
Source: Company's Website, Reuters & Capitaline
GODREJ AGROVET LIMITED CMP: 705.05 Target Price: 913 Upside: 30%
VALUE PARAMETERS Investment Rationale:
Face Value (Rs.) 10.00 Ÿ Godrej Agrovet Limited (GAVL) is a Research & Development focused agri-
business Company. It is engaged in the business of Animal Feed, Crop
52 Week High/Low 877.85/475.70
Protection, Oil Palm, Dairy and Poultry and Processed Foods. In the crop
M.Cap (Rs. in Cr.) 13555.39 protection segment, the company meets the niche requirement of farmers
through innovative agrochemical offerings. Through its subsidiary Astec Life
EPS (Rs.) 21.64
Sciences Limited, is also a business-to-business (B2B) focused bulk
P/E Ratio (times) 32.58 manufacturer of fungicides & herbicides. It has a joint venture with the ACI
group of Bangladesh for animal feed business in Bangladesh.
P/B Ratio (times) 5.72
Ÿ• The company has entered into strategic collaboration with US based Provivi,
Dividend Yield (%) 1.42
a global crop protection company, to deliver sustainable pest control
Stock Exchange BSE solutions tailored for rice and corn farmers in India. The company will
distribute Provivi’s YSB Eco-Dispenser, specifically designed to control
Yellow Stem Borer (YSB) in rice and will hold exclusive commercialization
SHAREHOLDING PATTERN rights for the FAW Eco-Dispenser targeting Fall Armyworm (FAW) in corn in
India.
Ÿ• It has recently announced the launch of Godrej Pride Hog, a scientifically
developed pig feed range designed to provide optimal nutrition at each stage
of a pig’s lifecycle. The range includes Starter, Grower, and Finisher variants,
ensuring balanced nutrition for better health, immunity, and growth.
Ÿ• According to the management, the company in the current fiscal has done
capex of Rs. 161 crores and expects to end up doing capex of Rs. 220 crores
for next year; it has similar capex plan.
Ÿ• Godrej Agrovet continues to invest strategically in cutting-edge R&D
capabilities across its business segments. Its subsidiary, Astec LifeSciences
Limited, recently launched an advanced R&D Center for Chemical Research,
P/BV CHART complementing its existing facilities in Animal Feed, Oil Palm and Crop
1000.00 Protection.
900.00
800.00 Ÿ• In Q3FY2025, the company continues to show robust performance in the
700.00 vegetable oil, animal feed and poultry businesses. Revenue growth by 4% to
600.00
Rs. 2,450 crore, EBITDA margins improved to 9.3% as compared to 7.3% in
500.00
400.00
Q3FY2024. Net profit was up by 17% to Rs. 99 crore. In the Animal Feed
300.00 segment, margins improved sharply from 4% in Q3 FY24 to 6% in Q3 FY25
200.00 on account of favorable commodity position. Vegetable Oil segment
100.00
delivered strong results driven by higher Crude Palm Oil and Palm Kernel Oil
0.00
prices and an improved Oil Extraction Ratio.
5-Jul-23
5-Jan-24
4-Sep-23
10-Jul-24
22-Jun-20
23-Jun-21
28-Jun-22
10-Jan-25
10-Sep-24
19-Aug-20
17-Dec-20
24-Aug-21
24-Dec-21
29-Aug-22
29-Dec-22
13-Feb-20
17-Feb-21
23-Feb-22
28-Feb-23
6-Nov-23
8-Nov-24
5-Mar-24
21-Apr-20
19-Oct-20
23-Apr-21
25-Oct-21
28-Apr-22
31-Oct-22
5-May-23
10-May-24
Ÿ• Its Dairy segment saw steady performance in segment revenue and margin.
3.10 4.30 5.50 6.70 Close Price
The company expects the trend to continue in Value Added Products which
reached 34% of total sales, improving both year-on-year and sequentially.
Astec Life Sciences made significant progress in Q3 FY25 and Company
expects this positive momentum to continue in the coming quarters.
FINANCIAL PERFORMANCE (Rs.in Cr.)
ACTUAL ESTIMATE ŸRisk
FY Mar-24 FY Mar-25 FY Mar-26 Ÿ• Unfavorable local and global weather patterns
REVENUE 9560.55 9575.62 10805.45 Ÿ• Supply chain issue
EBITDA 707.74 850.70 992.05 Valuation
EBIT 493.45 641.40 762.45 The company by strengthening its R&D infrastructure aim to accelerate the
development and commercialization of new products, enabling it to achieve
NET INCOME 359.67 445.75 561.00
sustainable growth and market leadership in the coming years. Its recent launch
EPS 18.71 24.04719 30.05 of Godrej Pride Hog and strategic collaboration with Provivi indicates sustain
growth visibility. Thus, it is expected that the stock may see a price target of Rs.
BVPS 141.31 150.55 169.15
913 in 8 to 10 months’ time frame on one year average P/BV of 5.4x and FY26 BVPS
RoE 14.23% 16.68% 18.88% of Rs. 169.15.
Source: Company's Website, Reuters & Capitaline
Above calls are published in “Wise Money Issue No. 984”
E-mail: [email protected]
Corporate Office: Mumbai Office: Kolkata Office:
11/6B, Shanti Chamber, Lotus Corporate Park , A Wing 401 / 402 , 18, Rabindra Sarani,
Pusa Road, New Delhi - 110005 4th Floor ,Graham Firth Steel Compound, Poddar Court,Gate No.- 4, 5th Floor, Kolkata-700001
Tel: +91-11-30111000 Off Western Express Highway, Jay Coach Signal, Tel: 91-33-39847000, Fax: 91-33-39847004
www.smcindiaonline.com Goreagon (East) Mumbai - 400063
Tel: 91-22-67341600, Fax: 91-22-28805606
Investments in securities market are subject to market risks, read all the related documents carefully before investing.
Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any
assurance of returns to investors. The securities quoted are for illustration only and are not recommendatory. SMC is a SEBI
registered Research Analyst having registration number INH100001849. CIN : L74899DL1994PLC063609.
SMC Global Securities Ltd. (hereinafter referred to as “SMC”) is regulated by the Securities and Exchange Board of India (“SEBI”) and is licensed to carry on the business of broking, depository services and related
activities. SMC is a registered member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited, MSEI (Metropolitan Stock Exchange of India Ltd) and M/s SMC Comtrade Ltd is a registered
member of National Commodity and Derivative Exchange Limited and Multi Commodity Exchanges of India and other commodity exchanges in India. SMC is also registered as a Depository Participant with CDSL
and NSDL. SMC’s other associates are registered as Merchant Bankers, Portfolio Managers, NBFC with SEBI and Reserve Bank of India. It also has registration with AMFI as a Mutual Fund Distributor.
SMC is a SEBI registered Research Analyst having registration number INH100001849. SMC or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing /dealing in
securities market. SMC or its associates or its Research Analyst or his relatives do not hold any financial interest in the subject company interest at the time of publication of this Report. SMC or its associates or its
Research Analyst or his relatives do not hold any actual/beneficial ownership of more than 1% (one percent) in the subject company, at the end of the month immediately preceding the date of publication of this
Report. SMC or its associates its Research Analyst or his relatives does not have any material conflict of interest at the time of publication of this Report.
SMC or its associates/analyst has not received any compensation from the subject company covered by the Research Analyst during the past twelve months. The subject company has not been a client of SMC
during the past twelve months. SMC or its associates has not received any compensation or other benefits from the subject company covered by analyst or third party in connection with the present Research Report.
The Research Analyst has not served as an officer, director or employee of the subject company covered by him/her and SMC has not been engaged in the market making activity for the subject company covered by
the Research Analyst in this report.
The views expressed by the Research Analyst in this Report are based solely on information available publicly available/internal data/ other reliable sources believed to be true. SMC does not represent/ provide any
warranty expressly or impliedly to the accuracy, contents or views expressed herein and investors are advised to independently evaluate the market conditions/risks involved before making any investment decision.
The research analysts who have prepared this Report hereby certify that the views /opinions expressed in this Report are their personal independent views/opinions in respect of the subject company.
Disclaimer: This Research Report is for the personal information of the authorized recipient and doesn't construe to be any investment, legal or taxation advice to the investor. It is only for private circulation and use.
The Research Report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. No action is solicited on the basis of the
contents of this Research Report. The Research Report should not be reproduced or redistributed to any other person(s)in any form without prior written permission of the SMC. The contents of this material are
general and are neither comprehensive nor inclusive. Neither SMC nor any of its affiliates, associates, representatives, directors or employees shall be responsible for any loss or damage that may arise to any
person due to any action taken on the basis of this Research Report. It does not constitute personal recommendations or take into account the particular investment objectives, financial situations or needs of an
individual client or a corporate/s or any entity/s. All investments involve risk and past performance doesn't guarantee future results. The value of, and income from investments may vary because of the changes in the
macro and micro factors given at a certain period of time. The person should use his/her own judgment while taking investment decisions. Please note that SMC its affiliates, Research Analyst, officers, directors, and
employees, including persons involved in the preparation or issuance if this Research Report: (a) from time to time, may have long or short positions in, and buy or sell the securities thereof, of the subject
company(ies) mentioned here in; or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the subject
company(ies) discussed herein or may perform or seek to perform investment banking services for such company(ies) or act as advisor or lender/borrower to such subject company(ies); or (c) may have any other
potential conflict of interest with respect to any recommendation and related information and opinions. All disputes shall be subject to the exclusive jurisdiction of Delhi High court.
