Stock market recommendations: According to Motilal Oswal Financial Services Ltd, the top stock picks for the week (starting February 24, 2025) are Hindalco and UltraTech. Let’s take a look:
Hindalco
HNDL’s 3QFY25 posted in line consl. results with ebidta/APAT up 29%/61% YoY, driven by favorable pricing & lower input costs, offsetting Novelis weak results. Novelis 4Q is expected to recover, led by higher vol. & better pricing/product mix. Indian FRP (flat rolled products) market is estimated to grow by ~20% in FY25, led by growth in packaging & cons. durables. It foresees 4% growth in aluminum FRP as global beverage packaging demand remains strong. Ongoing capex in Novelis will establish HNDL as the global leader in the beverage cans & automotive FRP seg. With strong domestic operations & expansion in key segments, HNDL is well-positioned for healthy earnings growth in FY26/27E.
UltraTech
UltraTech maintains industry leadership with capacity CAGR of 10% (FY15-24 vs. ind. avg 5%) & high utilization rate (76% vs ind. avg. 67%). Dom. grey capacity expected to reach 209.3mtpa by FY27, adding 43.6mtpa (75% organic add. & 25% inorganic). Cement demand is recovering post-festive season, with ind. vol. expected to grow 4% YoY in FY25, implying 7-8% growth in Q4. This growth is driven by pent-up demand, rebound in govt. spending, robust demand in real estate & housing sectors. It is anticipated to benefit from its increasing scale of operations, cost-saving strategies, low capex cost, and strong cash flow generation. We estimate consol. revenue/EBITDA/PAT CAGR at 17%/28%/32% over FY25-27.
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