9 Aug 2022 , 08:30 AM
Result date: 10th August, 2022
Recommendation: Buy
Target price: Rs489
Source: IIFL Research
Hindalco Industries (Hindalco) is likely to post 21.5% growth in consolidated revenues over the year-ago quarter. Sequentially, though the performance is likely to be weak. In other words, the company’s performance will be in sync with movement in LME Aluminium prices (up 21% over the year-ago quarter, down 11% sequentially). In India business, Hindalco’s aluminium volumes could post mid-single digit growth on a year-on-year basis. Copper volumes could increase by 24-25% over the year-ago quarter. Novelis could post flattish volumes sequentially as well as over the year-ago quarter.
In the India business, higher aluminium prices could partially compensate for increasing input costs (particularly coal). EBITDA margins of Novelis could be aided by strong show of cans segment, but could be negated by pressure from higher power and fuel costs. Higher Tc/Rc margins could drive EBITDA of the copper business. Consolidated EBITDA could grow 3.8% over the year-ago quarter.
Profit After Tax (PAT) could grow 4.2% over the year-ago quarter.
Important management insights to watch out for:
Rs. Billion | June 2022 estimates | YoY change | QoQ change |
Revenue | 502 | 21.5% | (9.9)% |
EBITDA | 62 | 3.8% | (11.4)% |
Profit After Tax | 28 | 4.2% | (29.7)% |
Source: Brokerage reports
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