Hindalco Q3 Results Review - Subdued Performance; Outlook Positive: Motilal Oswal

Motilal Oswal Report

Hindalco Industries Ltd.'s consolidated net sales rose 6% YoY (down 5% QoQ) to Rs 532 billion, 6% above our estimate of Rs 501 billion. Sales were driven by record-high production at the aluminum upstream vertical and better copper realizations.

Consolidated Ebitda fell 52% YoY and 34% QoQ to Rs 35 billion, 39% below our estimate of Rs 58 billion. Ebitda was impacted by rising input costs, an adverse forex impact and unfavorable macros.

Copper Ebitda rose 40% YoY to Rs 5.5 billion, significantly above our estimate, led by higher volumes of cold coil rods, higher realisations and better treatment/refining charges.

India aluminum sales volume rose 7% YoY to 349 thousand tonne, while copper sales volume was down 1% YoY at 109 kt. Trial production has started at the new 34 kt aluminum extrusion facility at Silvassa.

Hindalco's adjusted profit after tax was down 60% YoY and 38% QoQ at Rs 14 billion due to a decline in Ebitda and higher interest expenses.

For nine months-FY23, sales rose 20% YoY to Rs 1,673 billion, while Ebitda/profit after tax declined 18%/20% to Rs 173 billion/Rs 77 billion.

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