MOSL: HINDALCO (Buy)-Lower LME impacts performance
Hindalco: Lower LME impacts performance
(HNDL IN, Mkt Cap USD6.3b, CMP INR200, TP INR245, 22% Upside, Buy)
Hindalco India (standalone + Utkal) EBITDA declined 4% QoQ (-37% YoY) to INR11b (our estimate: INR11.4b) due to reduced LME prices, partly offset by lower costs. Adj. PAT increased 5% QoQ (-73% YoY) to INR2.0b (our estimate: INR2.2b).
- Aluminum EBITDA declined 4% QoQ (-37% YoY) to INR8.5b due to 8% QoQ lower EBITDA/t at USD367 (our estimate: USD379) owing to lower realization (LME down 2% QoQ).
- Aluminum production and sales increased 2% QoQ to 330kt and 328kt, respectively. Aluminum VAP sales were up 5% YoY at 78kt, giving it 24% share in volume.
- Aluminum CoP was lower by USD27/t QoQ led by reduced energy costs. CoP should reduce further as the benefit of lower caustic and oil prices is realized.
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.
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