Q3FY23 Preview: Hindalco Industries: Consolidated revenue seen at Rs 531,109 million, PAT at Rs 20,082 million

7 Feb 2023 , 10:34 AM

Result date: 9^th February, 2023

Recommendation: Buy

Target price: Rs 499

Source: IIFL Research

Hindalco Industries (Hindalco) could witness decline in consolidated revenue on a sequential basis owing to fall in LME Aluminum prices (averaged at $2,336/t, down 1.1% sequentially, 15% over the year-ago quarter). This, along with lower shipments of Novelis could put pressure on revenue.

Weakness in revenue is likely to trickle down to EBITDA which could decline 27% over the year-ago quarter and 0.5% sequentially. Lower EBITDA from Novelis, higher energy costs are prominent margin pressures.

Profit After Tax (PAT) could decline 42.3% over the year-ago quarter and about 8% sequentially.

Important management insights to watch out for:

• Guidance on domestic Aluminum demand.
• Timeline on greenfield aluminum rolling mill
• Commentary on availability and coal linkage is important
• Guidance on capex, aluminum spreads, CoP and Novelis EBITDA/t

Rs. Million	December 2022 estimates	YoY change	QoQ change
Sales	531,109	5.7%	(5.5)%
EBITDA	53,871	(27.2)%	(0.5)%
PAT	20,082	(42.3)%	(7.9)%

Source: Brokerage reports