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Axis Securities recommends Hindalco Industries, Coal India, APL Apollo, and JTL Industries as top picks in the metals and mining space, citing positive industry trends and company-specific growth factors.
In a recent report, Axis Securities has identified Hindalco Industries, Coal India, APL Apollo Tubes, and JTL Industries as its top four stock picks within the metals and mining sector. The brokerage firm cites a combination of recovering aluminum prices, strategic capacity expansions, and robust production targets as key drivers for their positive outlook on these companies.
Hindalco Industries: Axis Securities is optimistic about Hindalco due to the recovery in aluminum prices, supported by higher alumina prices. The brokerage also notes that higher aluminum prices on the London Metal Exchange (LME) and lower coal costs are favorable for Hindalco. Furthermore, the benefits from downstream capital expenditure (Capex) are expected to materialize, leading to increased free cash flow upon completion of expansion projects.
Coal India: For Coal India, Axis Securities anticipates that volume expansion will offset any potential decline in e-auction premiums. The company's ambitious production volume targets, coupled with a strong dividend yield, contribute to a positive long-term outlook. Axis Securities has a 'BUY' rating on Coal India, emphasizing its strong coal production ramp-up potential.
APL Apollo Tubes: Axis Securities expects demand for APL Apollo Tubes to rebound in the second half of fiscal year 2025 (H2FY25) after a sluggish monsoon season. The ramp-up of the Raipur plant is projected to drive higher EBITDA per tonne. The company's long-term target of achieving a 10 million tonnes per annum (mtpa) tube capacity is viewed as a positive catalyst.
JTL Industries: Similar to APL Apollo Tubes, Axis Securities foresees a demand recovery for JTL Industries in H2FY25. The company's long-term objective is to increase capacity to 2 mtpa, with a mid-term target of reaching 1 mtpa by FY25. Axis Securities maintains a 'BUY' rating on JTL Industries, citing its capacity expansion plans as a key growth driver.
Disclaimer: The views and recommendations provided in this article are based on the analysis of individual analysts or broking companies and do not represent the views of Mint. Investors are advised to consult with certified experts before making any investment decisions.
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