Hindalco Industries (Q4 FY12)

India Infoline News Service | Mumbai |

Operating profit of Rs8.7bn was higher than our estimate on the back of improved aluminium division performance

  • Q4 FY12 standalone revenue of Rs76.5bn was higher than our estimate of Rs70,7bn due to higher contribution from copper
  • EBIT from aluminium business improved on a qoq basis on the back of higher coal availability; EBIT increased 56.1% qoq to Rs4.8bn
  • Copper business EBIT jumped 35.8% qoq as volumes increased 8.3% qoq to 95,000 tons and higher by-product sales
  • Operating profit of Rs8.7bn was higher than our estimate on the back of improved aluminium division performance
  • Other income of Rs1.6bn was quite higher than our estimate of Rs1bn
  • We maintain our BUY rating on Hindalco with a revised 9-month price target of Rs164

Result table (Standalone)

(Rs mn)
Q4 FY12
Q3 FY12
% qoq
Q4 FY11
% yoy
Net sales
76,471
66,470
15.0
68,464
11.7
Material costs
(53,161)
(43,967)
20.9
(46,750)
13.7
Power and fuel costs
(7,440)
(7,385)
0.8
(5,865)
26.9
Personnel costs
(2,678)
(3,040)
(11.9)
(2,812)
(4.8)
Other overheads
(4,544)
(4,929)
(7.8)
(3,892)
16.8
Operating profit
8,648
7,149
21.0
9,145
(5.4)
OPM (%)
11.3
10.8
55 bps
13.4
(205) bps
Depreciation
(1,658)
(1,747)
(5.1)
(1,760)
(5.8)
Interest
(801)
(793)
0.9
(564)
42.0
Other income
1,605
901
78.2
1,051
52.7
PBT
7,794
5,509
41.5
7,872
(1.0)
Tax
(1,395)
(1,002)
39.1
(789)
76.8
Effective tax rate (%)
17.9
18.2
 
10.0
 
Adjusted PAT
6,400
4,507
42.0
7,084
(9.7)
Adj. PAT margin (%)
8.4
6.8
159 bps
10.3
(198) bps
Reported PAT
6,400
4,507
42.0
7,084
(9.7)
Ann. EPS (Rs)
26.7
18.8
42.0
29.6
(9.7)

Source: Company, India Infoline Research


Copper division lead to higher than expected topline growth

Q4 FY12 revenue of Rs77bn was higher than our estimate of Rs70bn on account of higher than estimate copper production. Copper division revenue was higher by 16.7% qoq to Rs51.5bn due a 8.3% increase in copper production and higher copper realisations. Copper production remained on the recovery path, rising from the low of 74,588 tons of production in Q2 FY12 due to bi-annual shutdown at its smelter. Copper production for the quarter was 95,000 tons, higher from 87,748 tons in Q3 FY12. This is the highest ever quarterly copper production for Hindalco. Aluminium division revenue was higher by 11.7% qoq on account of higher aluminium prices and higher product premiums. Aluminium metal production decreased by 1.6% qoq to 144,000 tons from 146,374 tons in Q3 FY12. Alumina production during the quarter gained marginally by 0.6% qoq to 345,000 tons as availability of bauxite improved.


Production volumes

(tons)
Q4 FY12
 Q3 FY12
% qoq
Q4 FY11
% yoy
Aluminium
345,000
343,086
0.6
344,077
0.3
Alumina
144,000
146,374
(1.6)
138,720
3.8
Rolled Products
55,689
55,598
0.2
48,218
15.5
Extrusion
8,744
7,190
21.6
7,319
19.5
Copper Cathodes
95,000
87,748
8.3
51,873
83.1
CC Rods
40,000
38,426
4.1
33,088
20.9

Source: Company, India Infoline Research

 

Segmental results

 
Q4 FY12
 Q3 FY12
qoq chng
Q4 FY12
 Q3 FY12
Sales (Rs m)
 
 
in %
Sales Contribution (%)
Aluminium Business
24,986
22,362
11.7
32.7
33.6
Copper Business
51,544
44,182
16.7
67.4
66.5
Less: Intersegment Rev
(60)
(74)
(19.3)
(0.1)
(0.1)
BSE 242.70 6.25 (2.64%)
NSE 242.75 6.35 (2.69%)

***Note: This is a NSE Chart

 

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