Results     15-Feb-24
Analysis
Hindalco Industries
Strong performance

Hindalco Industries consolidated net sales declined 0.65% to Rs 52808 crore in Q3FY24 compared to Q3FY223.  Sales of Novelis has gone down 6% to Rs 32749 crore (accounting for 59% of total sales).  Sales of Aluminium upstream fell 1% to Rs 7971 crore (accounting for 14% of total sales).  Sales of Aluminium downstream has gone down 4% to Rs 2547 crore (accounting for 5% of total sales).  Sales of Copper segment was up 16% to Rs 11954 crore (accounting for 22% of total sales).  Inter-segment sales fell 5% to Rs Rs 2413 crore. 

Profit before interest, tax and other unallocable items (PBIT) has jumped 36% to Rs 6985 crore.  PBIT of Novelis rose 33% to Rs 3783 crore (accounting for 54% of total PBIT).  PBIT of Aluminium upstream rose 54% to Rs 2443 crore (accounting for 35% of total PBIT).  PBIT of Aluminium downstream fell 34% to Rs 103 crore (accounting for 1% of total PBIT).  PBIT of Copper segment rose 20% to Rs 656 crore (accounting for 9% of total PBIT). 

PBIT margin of Novelis rose from 8.2% to 11.6%.  PBIT margin of Aluminium upstream rose from 19.8% to 30.6%.  PBIT margin of Aluminium downstream fell from 5.9% to 4%.  PBIT margin of Copper segment rose from 5.3% to 5.5%.  Overall PBIT margin rose from 9.2% to 12.6%. 

Operating profit margin has jumped from 6.68% to 11.11%, leading to 65.30% rise in operating profit to Rs 5,865.00 crore.  Raw material cost as a % of total sales (net of stock adjustments) decreased from 62.29% to 59.59%.   Purchase of finished goods cost fell from 1.89% to 1.34%.   Employee cost increased from 6.21% to 7.30%.   Other expenses fell from 22.85% to 20.63%.   Power and Oil fuel cost fell from 8.53% to 6.60%.   Provisions writeoffs cost rose from 0.12% to 0.35%.   Other provisions rose from 0.12% to 0.35%.  

Other income fell 23.50% to Rs 280 crore.  PBIDT rose 57% to Rs 6145 crore.  Provision for interest rose 1.07% to Rs 944 crore. 

PBDT rose 74.53% to Rs 5201 crore.  Provision for depreciation rose 6% to Rs 1874 crore. 

Profit before tax grew 174.50% to Rs 3,327.00 crore.  Share of profit/loss was 50% lower at Rs 1 crore.  Provision for tax was debit of Rs 997 crore, compared to credit of Rs 148 crore.  Effective tax rate was 29.96% compared to negative 12.19%.

Minority interest was nil in both the periods.  Net profit attributable to owners of the company increased 71.15% to Rs 2,331.00 crore.

Promoters’ stake was 34.64% as of 31 December 2023 ,compared to 34.64% as of 31 December 2022. 

Commenting on the results, Mr. Satish Pai, Managing Director, Hindalco Industries, said, “We continue to stay on our growth track despite challenging market conditions, delivering a strong performance, driven by an enhanced product mix and lower input costs across our businesses.

The Copper Business registered a record EBITDA, up 20% YoY on the back of strong volume growth and robust operations. The Aluminium Upstream Business EBITDA rose 54% YoY, supported by stable operations and lower raw material costs, which keeps us positioned in the first quartile of the global cost curve. We continue to invest in promising growth areas both in aluminium and copper downstream. Our overseas business and global recycling leader Novelis showed 33% YoY improvement in EBITDA and EBITDA per ton, driven by favourable metal benefit from recycling, higher pricing, and lower operating costs.

Robust cash generation in India operations enables further deleveraging of our India business; Hindalco has pre-paid long-term loans of Rs 4,370 crores during the year amid a high-interest rate scenario. On the ESG front, our first-of-its-kind energy transition initiative is on course to begin ramp-up of 100 MW of round-the-clock carbon-free power for our Odisha smelter, by Q4 of CY2024.”

Business Segment Performance in Q2FY24 (vs Q2FY23)

Novelis: Total shipments of flat rolled products were at 910 Kt in Q3 FY24 vs 908 Kt in Q3 FY23, flat YoY. Novelis’ revenue stood at $3.9 billion (vs $4.2 billion), down 6% YoY, impacted by lower average aluminum prices. Novelis reported an adjusted EBITDA of $454 million (vs $341 million), up 33% YoY driven by favourable metal benefit from recycling, higher pricing, and lower operating costs. Novelis’ adjusted EBITDA per ton, at $499, was up 33% YoY.

Aluminium (India): Upstream revenue was Rs 7,971 crore in Q3 FY24 vs Rs 8,046 crore in Q3 FY23. Aluminium Upstream EBITDA stood at Rs 2,443 crore in Q3 FY24, compared to Rs 1,591 crore in Q3 FY23, up 54% YoY driven by lower input costs. Upstream EBITDA margins were at 30.7% and continue to be one of the best in the global industry.

Downstream third quarter revenue was Rs 2,547 crore vs Rs 2,647 crore in Q3 FY23. Sales of Downstream Aluminium stood at 90 Kt vs 91 Kt in Q3 FY23, flat YoY. Downstream EBITDA was Rs 103 crore in Q3 FY24 compared to Rs 157 crore for Q3 FY23, down 34% YoY, majorly impacted by unfavourable product mix and lower realizations.

Copper: Revenue from the Copper Business stood at Rs 11,954 crore, up 16% YoY, driven by higher sales volumes and prices. EBITDA for the Copper Business was at an all-time high of Rs 656 crore in Q3 FY24 compared to Rs 546 crore in Q3 FY23, up 20% YoY backed by higher shipments and robust operations. Copper metal sales were 119 Kt (vs 109 Kt). Copper Continuous Cast Rod (CCR) sales were at 93 Kt (vs 88 Kt), up 6% YoY supported by growing market demand for value-added products and increased utilization of our rod mills.

For year-to-date (YTD) results analysis

Net sales (including other operating income) of Hindalco Industries has declined 4.41% to Rs 159968 crore.  Sales of Novelis has gone down 11% to Rs 100316 crore (accounting for 60% of total sales).  Sales of Aluminium upstream fell 4% to Rs 23913 crore (accounting for 14% of total sales).  Sales of Aluminium downstream has gone down 8% to Rs 7611 crore (accounting for 5% of total sales).  Sales of Copper segment was up 18% to Rs 35897 crore (accounting for 21% of total sales).  Inter-segment sales fell 10% to Rs Rs 7769 crore. 

Profit before interest, tax and other unallocable items (PBIT) rose 2% to Rs 19950 crore.  PBIT of Novelis was flat at Rs 11237 crore (accounting for 56% of total PBIT).  PBIT of Aluminium upstream rose 4% to Rs 6452 crore (accounting for 32% of total PBIT).  PBIT of Aluminium downstream fell 18% to Rs 421 crore (accounting for 2% of total PBIT).  PBIT of Copper segment rose 11% to Rs 1840 crore (accounting for 9% of total PBIT). 

PBIT margin of Novelis rose from 10% to 11.2%.  PBIT margin of Aluminium upstream rose from 24.9% to 27%.  PBIT margin of Aluminium downstream fell from 6.2% to 5.5%.  PBIT margin of Copper segment fell from 5.4% to 5.1%.  Overall PBIT margin rose from 11.1% to 11.9%. 

Operating profit margin has jumped from 10.36% to 10.75%, leading to 0.85% decline in operating profit to Rs 17,191.00 crore.  Raw material cost as a % of total sales (net of stock adjustments) decreased from 61.55% to 61.21%.   Purchase of finished goods cost rose from 0.86% to 1.02%.   Employee cost increased from 5.72% to 6.88%.   Other expenses fell from 21.44% to 20.16%.   Power and Oil fuel cost fell from 8.12% to 6.78%.   Provisions writeoffs cost rose from 0.07% to 0.14%.   Other provisions rose from 0.07% to 0.14%.

Other income rose 25.30% to Rs 1134 crore.  PBIDT rose 0.44% to Rs 18325 crore.  Provision for interest rose 11.65% to Rs 2970 crore. 

PBDT fell 1.47% to Rs 15355 crore.  Provision for depreciation rose 5.22% to Rs 5503 crore. 

Profit before tax down 4.85% to Rs 9,852.00 crore.  Share of profit/loss was 57.14% lower at Rs 3 crore.  Extraordinary items were decreased to Rs 21.00 crore.  Provision for tax was expense of Rs 2895 crore, compared to Rs 2716 crore.  Effective tax rate was 29.31% compared to 26.11%.

Minority interest was nil in both the periods.  Net profit attributable to owners of the company decreased 9.17% to Rs 6,981.00 crore. 

Promoters’ stake was 34.64% as of 31 December 2023 ,compared to 34.64% as of 31 December 2022 . 

The scrip is currently trading at Rs 510. 

 

Hindalco Industries : Consolidated Results

Particulars

2312 (03)

2212 (03)

Var.(%)

2312 (09)

2212 (09)

Var.(%)

2303 (12)

2203 (12)

Var.(%)

Net Sales

52,808

53,151

-1

1,59,968

1,67,345

-4

2,23,202

1,95,059

14

OPM (%)

11.1

6.7

 

10.8

10.4

 

10.2

14.5

 

OP

5,865

3,548

65

17,191

17,339

-1

22,666

28,347

-20

Other Inc.

280

366

-24

1,134

905

25

1,257

1,136

11

PBIDT

6,145

3,914

57

18,325

18,244

0

23,923

29,483

-19

Interest

944

934

1

2,970

2,660

12

3,646

3,768

-3

PBDT

5,201

2,980

75

15,355

15,584

-1

20,277

25,715

-21

Depreciation

1,874

1,768

6

5,503

5,230

5

7,086

6,729

5

PBT

3,327

1,212

175

9,852

10,354

-5

13,191

18,986

-31

Share of Profit/(Loss) from Associates

1

2

-50

3

7

-57

9

6

50

PBT before EO

3,328

1,214

174

9,855

10,361

-5

13,200

18,992

-31

EO Income

0

0

-

21

41

-49

41

582

-93

PBT after EO

3,328

1,214

174

9,876

10,402

-5

13,241

19,574

-32

Taxation

997

-148

PL

2,895

2,716

7

3,144

5,373

-41

PAT

2,331

1,362

71

6,981

7,686

-9

10,097

14,201

-29

Minority Interest (MI)

0

0

-

0

0

-

0

0

-

Net profit

2,331

1,362

71

6,981

7,686

-9

10,097

14,201

-29

EPS (Rs)*

#

#

 

#

#

 

44.8

61.3

 

Notes

* EPS is on current equity of Rs 224.72 crore, Face value of Rs 1, Excluding extraordinary items.

# EPS is not annualised

bps : Basis points

EO : Extraordinary items

Figures in Rs crore

Source: Capitaline Corporate Database

 


Hindalco Industries : Consolidated Segment Results

 

% of (Total)

2312 (03)

2212 (03)

Var.(%)

% of (Total)

2312 (09)

2212 (09)

Var.(%)

% of (Total)

2303 (12)

2203 (12)

Var.(%)

Sales

 

 

 

 

Novelis

59

32,749

34,685

-6

60

1,00,316

1,12,295

-11

18

41,702

36,723

14

Aluminium Upstream

14

7,971

8,046

-1

14

23,913

24,960

-4

63

1,48,471

1,27,747

16

Aluminium Downstream

5

2,547

2,647

-4

5

7,611

8,271

-8

14

33,010

30,844

7

Copper

22

11,954

10,309

16

21

35,897

30,496

18

5

11,009

11,009

0

Total Reported Sales

100

55,221

55,687

-1

100

1,67,737

1,76,022

-5

100

2,34,192

2,06,323

14

Less: Inter segment revenues

 

2,413

2,536

-5

 

7,769

8,677

-10

7151

-9,460

LP

 

Net Sales

 

52,808

53,151

-1

 

1,59,968

1,67,345

-4

 

2,27,041

2,15,783

5

PBIT

 

 

 

 

Novelis

54

3,783

2,848

33

56

11,237

11,229

0

9

2,253

1,390

62

Aluminium Upstream

35

2,443

1,591

54

32

6,452

6,210

4

56

14,543

15,229

-5

Aluminium Downstream

1

103

157

-34

2

421

515

-18

33

8,402

12,496

-33

Copper

9

656

546

20

9

1,840

1,655

11

2

627

382

64

Total PBIT

100

6,985

5,142

36

100

19,950

19,609

2

100

25,825

29,497

-12

Less : Interest

 

944

934

1

 

2,970

2,660

12

 

3,646

3,768

-3

Add: Other un-allcoable

 

-2,713

-2,994

-9

 

-7,104

-6,547

9

 

-8,938

-6,155

-45

PBT

 

3,328

1,214

4

 

9,876

10,402

4

 

13,241

19,574

-32

 

 

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