Hindalco Industries Ltd. share price target

Novelis' Adj. EBITDA grew 39% YoY/5% QoQ at US$476mn (US$455) on back of 24% YoY (+6.5% QoQ) growth in Novelis' legacy operation's EBITDA at US$426mn and 15% YoY (down 9% QoQ) inorganic growth....

Hindalco Industries Limited, a global leader in aluminium and copper, announced consolidated results for the quarter ended September 30, 2020. Despite a one-time impact of Rs.1,398 crore on account of the divestiture of the Lewisport unit of Aleris, the Company reported a...

Company witnessed strong recovery across the segments except Aerospace. All plants are operating at near full capacity with margins in guided range. Strong margins and stable volumes would help reduce debt by ~10% every year with Net debt/EBITDA falling below 3x by FY23. However, divestment of Aleris' Lewisport facility came as a negative due to low valuations at US$330mn (PLe:US$600mn), ~30% below the estimated investment of ~US$500mn on the facility. While, strong margins trajectory would help in offsetting the impact of lower valuations realised on divestment of assets....

Higher LME and lower cost to boost profitability Hindalco (HNDL)'s 2QFY21 results were strong, as expected. India EBITDA increased 43% QoQ to INR12.7b on LME recovery. With integrated CoP guided flattish v/s 2QFY21 and improved LME, Hindalco's profitability is expected to remain high despite ~58% of LME being booked at lower LME for 2HFY21. We broadly maintain our FY21/FY22 estimate. Hindalco remains our top pick in the Metals sector on expected deleveraging in FY22E. This would...

Hindalco (HNDL)'s subsidiary Novelis' 2QFY21 EBITDA surprised with 20% YoY growth to USD455m (est. USD348m). This was led by 11% YoY volume growth (Aleris acquisition) and adj. EBITDA/t of USD493 (est. USD396). Management has raised the sustainable EBITDA margin guidance for Novelis to USD480500/t (from USD450475/t). We raise our FY21E EBITDA by 7%, factoring in strong margins for Novelis. Deleveraging is also playing out well, with strong FCF and asset divestitures while the sale of Duffel has been completed, the sale of Lewisport has been...

Hindalco (HNDL) remains our preferred non-ferrous pick owing to its (a) robust volume recovery both in India and Novelis, (b) strong primary aluminum business profitability given its low-cost integrated aluminum operations in India (in top quartile globally) and higher LME, (c) solid FCF generation, which should reduce leverage sharply, and (d) reasonable valuation. With ~70% EBITDA contribution now coming from the non-LME business (Novelis), we also see relatively higher stability in HNDL's earnings. While we expect aluminum prices to sustain on the back of demand recovery,...

Hindalco reported net sales of Rs. 25,283cr, a decline of 15.6% YoY due to sharp decline in its aluminum and copper businesses. Aluminum business net revenue fell to Rs. 4,436cr (-19.2%YoY) majorly impacted by lower aluminum prices. Aluminum metal sales Q1FY21 sales was down 5.3% YoY to 303Kt due to low demand in infrastructure and industrial segments. Copper business fell 34.0% YoY to Rs. 3,031cr due to lower volumes and realization of copper and by-products. Novelis revenue reached to Rs....

Other income rose 42% to Rs 419 crore. PBDIT decreased 38% to Rs 2352 crore. Interest cost rose 4% to Rs 992 crore in current quarters compared to Rs 957 core in the corresponding previous year quarter. Depreciation rose 25% to Rs 1544 crore. PBT before EO reported loss of...

Hindalco (HNDL) reported Q1FY21 earnings in line with our expectation. Improvement in prices and lower cost of production (CoP) shall continue to support AL earnings. While, Copper (CU) operation's earnings would remain under pressure in FY21e due to 23% reduction in Treatment/Refining charges (Tc/Rc) for CY20 at 15.9/lb, planned shutdowns and weak demand....

EBITDA was down 40% YoY to USD219m on like-to-like basis (excluding Aleris) due to the impact of COVID-19. Aleris) with EBITDA of USD34m (included in 1QFY21 results). Re-iterate *estimate based on ex-Aleris basis, hence, not comparable Beverage can volumes declined to low single-digit during the quarter as weakness in South America and Asia can volumes was offset by strong demand Demand remains resilient in North America and Europe due to strong in-house consumption trend. The company achieved record shipments in automotive in China during the However, volumes recovered gradually during the quarter led by restocking demand from customers and are back to pre-COVID levels. Demand is also gradually improving on MoM basis, led by strong demand from Management expects aluminum-scrap spreads to remain strong in North Interest cost should stand at USD260-270m for the full year (v/s USD240m in FY20), which is lower than expected due to lower prevailing interest rates.