Hindalco Q2 Results Review - Results Inline; Coal Costs To Moderate Marginally: Motilal Oswal
The near-term cost of production will start reducing on better coal availability.
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Motilal Oswal Report
Hindalco Industries Ltd. reported yet another inline but weak set of results, largely attributed to lower London Metal Exchange aluminum price (down 11% YoY/down 18% QoQ); costs also continued to rise resulting in a 36% QoQ decline in consolidated Ebitda in Q2 FY23.
Consolidated net sales stood at Rs 562 billion (up 18% YoY/down 3% QoQ), 12% beat to our est. of Rs 501 billion. Higher YoY sales were driven by strong performance from Asia operations of Novelis and higher copper average selling price.
Hindalco's consolidated Ebitda at Rs 54 billion was down 29% YoY/36% QoQ but was in line with our estimate of Rs 55 billion.
India Ebitda was a significant beat as the cost escalation, especially on thermal coal, was markedly lower than estimate and the company was also carrying low-value inventory.
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