- 07 Feb 2023
- ICICIdirect Research
NOVELIS Q3FY23 IMPACTED BY INFLATION HEADWINDS
HINDALCO - 650 Change: 0.55 (0.08 %)News: For Q3FY23, Novelis , Hindalco’s wholly owned subsidiary, reported shipments of 908 KT, down 2% YoY lower than our estimate of 950 KT. Lower shipments was due to significantly larger than anticipated customer inventory reduction actions in the beverage packaging market. EBITDA/tonne for the quarter stood at US$ 376/tonne, lower than our estimate of US$ 400/tonne. Adjusted EBITDA for the quarter was at US$ 341 million, lower than our estimate of US$ 380 million
Views: While Novelis reported a subdued performance for Q3FY23, the performance is set to improve, going forward, due as the renegotiated contracts takes effect during the current calendar year 2023 . Depending on the time frame of contracts, Novelis is set to get price hikes for some contracts from 1st January, 2023 and for some from April 1, 2023. Furthermore some costs are also likely to witnessed a declining trend, going forward. Hence, going forward, Novelis' EBITDA/tonne is likely to see an uptick from Q3FY23 level thereby auguring well for the company
Impact: Neutral