Hindalco Q4 Review - Uncertain Medium-Term Trajectory: ICICI Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Securities Report.While long-term value can be argued for in Hindalco Industries Ltd., the medium-term (~ one year) uncertainties are too staggering to ignore. There is an overhang of possible Indian export duty on aluminium. The cost pressures in domestic aluminium business are leading to earnings downgrade. Novelis Ebitda sits precariously at $500/tonne when the U.S. has started hinting on removing of duties on China; a reciprocation will lead to China removing 25% import duty on U.S. scrap, leading to a collapse in scrap London Metal Exchange spreads. Also, weakening U.S. housing/construction market will have a direct impact on specialies volumes – Aleris acquisition success has been largely driven by increased volumes and spreads of the specialties portfolio. The earnings and the return on equity profile of Hindalco would look very different with Novelis spreads at $400/te as against $500/tonne at present. Further, the increase in capex is not allowing any deleveraging..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Hindalco Q4 Review - Uncertain Medium-Term Trajectory: ICICI Securities

Hindalco Q4 Review - Uncertain Medium-Term Trajectory: ICICI Securities

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