Hindalco Cheapest In 12 Years

Hindalco Industries Ltd.’s stock is the cheapest in 12 years, having fallen more than the metal benchmark so far this year.

Shares of India’s largest aluminium producer have declined 25 percent in 2018 compared with a 20 percent fall in the NSE Nifty Metal Index. It now trades at 5.6 times its estimated enterprise--to-Ebitda for FY19, the lowest since FY07 and at a discount of 21 percent to its five-year average.

That makes it a re-rating story, JPMorgan said in a note, suggesting the stock could rise. It’s ‘overweight’ on Hindalco. The company deserves a higher multiple given that even smaller peers of its downstream global arm Novelis command a higher multiple at 7-8 times EV/Ebitda, it said.