Hindalco Industries Ltd's Q3FY19 standalone net profit declines 45.3% yoy to Rs247cr : Misses Estimates

The company’s standalone revenue stood at Rs11,938cr, up 8.3% yoy and 10.2% qoq.

Feb 12, 2019 08:02 IST India Infoline Research Team

Hindalco Industries Ltd Q3FY19

Standalone Results Q3FY19: (Rs. in cr)

Q3FY19 YoY (%)
Revenue 11,938 8.3
EBITDA 928 [29.6]
EBITDA Margin (%) 7.8 [419]
Net Profit (adjusted) 247 [45.3]
***EBITDA margin change is bps

Hindalco Ltd missed standalone estimates for Q3FY19 due to sharp decline in profitability for the aluminium segment (ex-Utkal). Revenue rose by 8.3% yoy to Rs11,938cr (expectation Rs12,283cr). EBITDA stood at Rs928cr, down 29.6% yoy against estimates of Rs1,200cr. EBIDTA margin fell by 419bps yoy to 7.8%. Net Profit stood at Rs247cr against an estimate of Rs395cr.
  • Production for the aluminum segment in Q3FY19 stood at:
    • Alumina – 749k tonnes, up 2% yoy.
    • Aluminum – 324k tonnes, flat yoy.
    • VAP – 120k tonnes, down 2% yoy. This was due to lower production of wire rods.
  • Production for the copper segment in Q3FY19 stood at:
    • Cathodes – 105k tonnes, up 4% yoy.
    • CC Rod –66k tonnes, up 61% yoy. Ramp up of CCR-3 facility.
    • DAP – 76k tonnes, up 33% yoy.
  • Aluminium segment (ex-Utkal) reported an EBITDA of Rs515cr, down 46% yoy. Aluminium segment (including Utkal) reported an EBITDA of Rs1,926cr, up 8% yoy. This was due to the higher transfer price of alumina at Utkal.
  • Copper segment reported EBITDA of Rs431cr, down 8% yoy. This was due to higher DAP and CCR production for the quarter.
  • Novelis reported a stable quarter with revenue growing by 3% yoy to $3bn in Q3FY19. Adjusted EBITDA stood at $322mn, up 6% yoy. EBIDTA per tonne was higher by 5% yoy at $403 due to favourable product mix as well as cost efficiencies. For details click here.
  • The company prepaid Rs1,575cr in debt in October 2018. This brought the net debt to EBITDA (TTM) at the end of December 2018 to 2.36x from 2.67x at the end of March 2018.

Technical View:

Hindalco Industries Ltd is currently trading at Rs. 200.65, up by 1.3 points or 0.65% from its previous closing of Rs. 199.35 on the BSE.
The scrip opened at Rs. 200.15 and has touched a high and low of Rs. 202.70 and Rs. 197.15 respectively. So far 1,28,42,008 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 200 DMA.

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