MOSL: Hindalco (Buy)-Operationally in line; Ali margins down on higher cost; Cutting estimates given lower LME
Hindalco: Operationally in line; Ali margins down on higher cost; Cutting estimates given lower LME
(HNDL IN, Mkt Cap USD6.2b, CMP INR195, TP INR253, 30% Upside, Buy)
Hindalco India (standalone + Utkal): 4QFY19 EBITDA declined 15% QoQ to INR13.6b (in-line) due to lower margins in aluminum and certain one-time expenses in copper. Finance cost was down 4% QoQ (-8% YoY) to INR4.5b. Other income increased 79% QoQ/75% YoY to INR3.7b, led by mark-to-market gains on investments. PAT of INR5.1b (-29% QoQ) exceeded our estimate of INR4b due to higher other income.
- Aluminum EBITDA/t was down 17% QoQ to USD456 (our estimate: USD435) due to lower realization (LME was lower, partly offset by hedging gains), higher cost and currency appreciation. Aluminum production/sales were largely stable QoQ at 321kt/325kt. Aluminum EBITDA fell 19% QoQ to INR10.4b.
- Copper production was down 15% QoQ/YoY to 89kt due to production disruption. Sales, however, were flat at 100kt (in-line). Copper EBITDA was down 27% QoQ to INR3.1b.
- For FY19, India EBITDA increased 6% YoY to INR66.7b. Aluminum EBITDA/t was marginally higher at USD584. Adj. PAT grew 19% YoY to INR26.8b due to lower interest cost.
Hindalco Industries is engaged in the production and sale of aluminum and copper in India and internationally. Co.'s aluminum products include rolled products, extrusions, foils, primary aluminum ingots, billets, wire rods, and aluminum slabs; and aluminum chemicals, such as standard alumina, standard hydrate and specialty aluminas and hydrates for use in refractories, ceramics, fire retardant plastics, alum, and zeolite applications. Co. also offers aluminum foil and packaging solutions to pharmaceuticals, healthcare, dairy, confectionery, processed foods, personal products, and tobacco industries, as well as to the heat, ventilation, and air conditioning industries.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.