Hindalco Industries Ltd's Q1FY20 standalone net profit (adj.) declines 91.1% yoy to Rs37cr : Misses Estimates

The company’s standalone revenue stood at Rs10,055cr, down 5.1% yoy and 18.7% qoq.

Aug 09, 2019 01:08 IST India Infoline Research Team

Hindalco Industries Ltd Q1FY20

Standalone Results Q1FY20: (Rs. in cr)

Q1FY20 YoY (%)
Revenue 10,054.65 [5.1]
EBITDA 717.44 [45.9]
EBITDA Margin (%) 7.1 [538]
Net Profit (adjusted) 36.78 [91.1]
***EBITDA margin change is bps
Hindalco Industries Ltd's standalone numbers came in below expectations. Revenue declined by 5.1% yoy and 18.7% qoq to Rs10,055cr (median consensus expectation Rs10,791cr). EBITDA stood at Rs717cr, down 45.9% yoy and 20.5% qoq against median consensus estimates of Rs954cr. EBIDTA margin contracted by 538bps yoy and 16bps qoq to 7.1%. Net Profit stood at Rs23cr against an median estimate of Rs162cr.
  • There were exceptional items during the quarter related to Profit on sale of Company's aluminium foil manufacturing unit (Rs25cr) and expenses incurred towards restoration of Red Mud Pond and other related expenses in alumina refinery at Muri, Jharkhand (Rs47cr) resulting in net exceptional expenses of Rs22cr. Adjusting for these, the PAT would have been Rs37cr for Q1FY20.
  • Aluminium revenues (incl. Utkal) came in it at Rs5,472cr, down 3.5% yoy, impacted by lower realisations. Margins declined from 27%/17.8% in Q1FY19/Q4FY19 to 16.2% in Q1FY20. EBITDA margins are one of the best amongst global peers as per the company release.
  • Production for the Aluminium segment in Q1FY20 stood at:
    • Alumina (including Utkal)– 686 tonnes, down 1.3% yoy and 8.4% qoq. Alumina production was impacted by Muri plant closure which was partially mitigated by higher production at Utkal Alumina
    • Aluminium– 326k tonnes, up 1%/2% yoy and qoq
    • VAP – 79k tonnes, up 1% yoy
  • Sales Volume – Aluminium Metal & VAP
    • Aluminium Metal sales higher by 7% yoy
    • Aluminium VAP shipments has grown 13% yoy
    • Aluminium VAP was 24% of total metal sales (vs. 23% in Q1FY19)
  • Production for the copper segment in Q1FY20 stood at:
    • Cathodes – 79k tonnes, down ~6% yoy impacted due to the planned maintenance shutdown in Q1FY20
    • CC Rod –66k tonnes, up ~2% yoy
    • DAP – 36k tonnes, down ~49% yoy due to planned maintenance shutdown and operational issues
  • Sales Volume – Copper & VAP
    • The total copper metal sales remained steady at 82k tonnes in Q1 FY20 vs Q1 FY19
    • Revenue from the Copper Business was at Rs4,593cr in Q1FY20 vs. Rs5,012cr in Q1FY19
    • EBITDA was lower at Rs267cr in Q1FY20 compared to Rs347cr in Q1FY19, due to lower by-product volumes and realisations

Technical View:

Hindalco Industries Ltd is currently trading at Rs. 177.55, down by 3.5 points or 1.93% from its previous closing of Rs. 181.05 on the BSE.
The scrip opened at Rs. 182 and has touched a high and low of Rs. 184.25 and Rs. 176 respectively. So far 96,03,923 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 200 DMA.

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