Hindalco Industries Ltd's Q4FY18 standalone net profit declines 25% yoy to Rs377cr : Misses Estimates

The company’s standalone revenue stood at Rs11,611cr, down 1.2% yoy but up 5.3% qoq

May 16, 2018 09:05 IST India Infoline Research Team

Hindalco Industries Ltd Q4FY18

Standalone Results Q4FY18: (Rs. in cr)

Q4FY18 YoY (%)
Revenue 11,611 [1.2]
EBITDA 1,257 [6.6]
EBITDA Margin (%) 10.8 [64]
Net Profit (adjusted) 377 [25.0]
***EBITDA margin change is bps


Reco. Price


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Hindalco Ltd missed estimates for Q4FY18, as higher operating costs from the aluminium segment lowered earnings on a standalone basis. Revenue fell by 1.2% yoy to Rs11,611cr (expectation Rs11,286cr). EBITDA stood at Rs1,258cr, down 6.6% yoy against estimates of Rs1,298cr. EBIDTA margin fell by 64bps yoy to 10.8%. Net Profit stood at Rs377cr against an estimate of Rs465cr.
  • Hindalco’s Aluminum revenue fell by 0.6% yoy, while EBITDA grew by 11.5% yoy. This was due to growth in premium of ~18% yoy for aluminum. Production of Aluminum metal rose by 0.9% yoy (320k tonnes) and value added products fell by 1.6% (123k tonnes).
  • Hindalco’s Copper revenue and EBITDA fell by 0.5% yoy and 33% yoy respectively. This was due to production issues, which led to significantly lower DAP production.
  • Novelis reported a strong quarter with revenue and adjusted EBITDA growing by 17% yoy and 9% yoy respectively. This growth was supported by higher auto shipments. EBITDA per tonne for Novelis stood at $396.
  • Net Debt-to-EBITDA stood at 2.8x at the end of FY18.
Conference Call Highlights
  • The management informed that the domestic aluminium industry is in talks with the government to come out with import quotas to help protect domestic producers against dumping.
  • The copper segment is expected to recover from Q2FY19 onwards due to ramp up of CCR-3, after it had been shut in Q4FY18 for maintenance activities.
  • Regarding hedging policy the management stated that they have hedged 28% of exposure at $2,100 per tonne for rupee LME and an additional 12% at $2,270 for the metal. The management aims to keep hedges at ~30% level going forward.
  • Domestic capex guidance for FY19 stands at Rs1,600cr. This includes capex for expanding alumina production at Utkal as well as increasing of downstream capacity. Capex for Novelis is expected at $370-380mn

Technical View:

Hindalco Industries Ltd is currently trading at Rs. 240.50, down by 2.6 points or 1.07% from its previous closing of Rs. 243.10 on the BSE.
The scrip opened at Rs. 242.50 and has touched a high and low of Rs. 247.30 and Rs. 237.40 respectively. So far 1,61,91,138 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 200 DMA.

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