Consolidated performance to improve, going forward...
About The Stock
Hindalco is the world’s largest aluminium company by revenues and a major player in copper.
Hindalco is one of Asia’s largest producers of primary aluminium
Novelis has leveraged its extensive recycling footprint and favourable market conditions to increase its recycled content to 61% in FY21
Q3FY23
Hindalco reported a mixed bag performance in Q3FY23 wherein the India business performance came in better than our estimate but Novelis performance came in lower than our estimate.
For Q3FY23, India business reported a topline of ₹ 19432 crore (our estimate: ₹ 19212 crore). Indian aluminium business reported sales volume of 349000 tonnes (our estimate of 340000 tonnes). Indian copper business reported sales volume of 109000 tonnes (our estimate of 110000 tonnes)
Hindalco’s Indian business EBITDA (business segment EBITDA) was at ₹ 2294 crore (our estimate: ₹ 2086 crore). Indian aluminium business EBITDA was at ₹ 1748 crore (our estimate of ₹ 1611 crore). Of the overall India aluminium business EBITDA, upstream aluminium business EBITDA was at ₹ 1591 crore while downstream aluminium business EBITDA was at ₹ 157 crore. Indian copper business EBITDA was at ₹ 546 crore (our estimate: ₹ 475 crore). Ensuing PAT of India business was at ₹ 1195 crore (our estimate: ₹ 760 crore)
For Q3FY23, Novelis’ shipments were at 908 KT, down 2% YoY, lower than our estimate of 950 KT. Adjusted EBITDA/tonne for the quarter was at US$376/tonne, lower than our estimate of US$400/tonne
Aluminium & Aluminium Products company Hindalco Industries announced Q3FY24 results:
Financial Performance
- Consolidated Net Profit stood at Rs 2,331 crore, marking a significant increase of 71% YoY.
- Consolidated EBITDA was Rs 6,322 crore, up by a robust 61% YoY.
- Revenue from Operations saw a marginal decrease of 1% YoY to Rs 52,808 crore.
- The company reported a consolidated Net Debt to EBITDA ratio of 1.43x, an improvement from 1.6x as of December 31, 2022.
Business Segment Results
- Novelis: Adjusted EBITDA per ton reached $499, up 33% YoY, with adjusted EBITDA at $454 million, a rise again by 33% YoY.
- Aluminium Business (India):
- Upstream EBITDA grew by 54% YoY to Rs 2,443 crore.
- Downstream EBITDA decreased by 34% YoY to Rs 103 crore.
- Copper Business: EBITDA reached a record Rs 656 crore, an increase of 20% YoY.
Operational Highlights
- Record Copper EBITDA was supported by higher volumes and robust operations.
- Novelis saw improvement driven by favorable metal benefits from recycling and lower operating costs.
- The Indian Aluminium Upstream Business maintained industry-leading EBITDA margins at 30.7%.
Business Updates
- Hindalco has prepaid long-term loans of Rs 4,370 crore during the year.
- The company's India business began working on India's first Copper and e-waste recycling project in Gujarat.
- Work on the nation's first Copper Inner Grooved Tubes plant is set to be commissioned by the end of CY2024.
Commenting on the results, Satish Pai, Managing Director, Hindalco Industries, said, “We continue to stay on our growth track despite challenging market conditions, delivering a strong performance, driven by an enhanced product mix and lower input costs across our businesses.
The Copper Business registered a record EBITDA, up 20% YoY on the back of strong volume growth and robust operations. The Aluminium Upstream Business EBITDA rose 54% YoY, supported by stable operations and lower raw material costs, which keeps us positioned in the first quartile of the global cost curve. We continue to invest in promising growth areas both in aluminium and copper downstream. Our overseas business and global recycling leader Novelis showed 33% YoY improvement in EBITDA and EBITDA per ton, driven by favourable metal benefits from recycling, higher pricing, and lower operating costs.
Robust cash generation in India operations enables further deleveraging of our India business; Hindalco has pre-paid long-term loans of Rs 4,370 crores during the year amid a high-interest rate scenario. On the ESG front, our first-of-its-kind energy transition initiative is on course to begin ramping up of 100 MW of round-the-clock carbon-free power for our Odisha smelter, by Q4 of CY2024.”
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