Hindalco Q3 Results Review - Ebitda In Line, While PAT Misses Our Estimates: Motilal Oswal

Motilal Oswal Report

Hindalco Industries Ltd.’s Q3 FY24 consolidated revenue was flat YoY at Rs 528 billion, in line with our estimate of Rs 508 billion. While revenue from the copper business fared better, driven by higher shipments and a better-than-estimated ASP, revenue from the aluminum vertical and Novelis declined 3% and 6% YoY, respectively.

Consolidated Ebitda jumped 65% YoY to Rs 59 billion, which was in line with our estimate of Rs 62 billion. Ebitda improved on the back of lower input prices, supported by stable operating performance.

Ebitda for the blended aluminum business stood at Rs 25 billion (up 43% YoY), with an Ebitda margin of over 28%, which positions Hindalco in the first quartile of the global cost curve. Ebitda for the copper business stood at an all-time high of Rs 65.6 billion (up 20% YoY), propelled by higher shipments and robust operating performance.

Hindalco’s finance cost rose 1% YoY to Rs 9.4 billion, while depreciation came in at Rs 18.7 billion (up 6% YoY) in Q3 FY24. Adjusted profit after tax increased 71% YoY to Rs 23 billion, a miss on our estimate of Rs 29 billion.

The miss was attributed to higher depreciation, a higher tax outgo, and lower other income, which was partially offset by lower finance cost.

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