Hindalco’s Analyst Meet Update - Status Quo Maintained: ICICI Securities
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ICICI Securities Report
Hindalco Industries Ltd.’s management delineated the company’s capital allocation strategy.
Free cash flow guidance stands at $1 billion-1.2 billion post-normal working capital and maintenance capex; cumulative FCF (pre-growth-capex) is guided at $5 billion-6 billion over the next five years.
Management targets deleveraging of $2.9 billion over the same period – of which $2.6 billion will be in Novelis and $0.3 billion in Hindalco (India).
Growth capital has been earmarked at $2.5 billion-3 billion over the next three years. This does not leave much room for a return to shareholders (amounts to Rs 3-4/share based on 8-10% of FCF).
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