MOSL: HINDALCO-Strong numbers in a seasonally weak quarter-Guidance raised again
Hindalco: Strong numbers in a seasonally weak quarter; Guidance raised again; Maintain Buy
(HNDL IN, Mkt Cap USD8.8b, CMP INR257, TP INR323, 26% Upside, Buy)
Novelis continued to improve its EBITDA even in the seasonally weakest quarter of the year. 3QFY18 adj. EBITDA increased 20% YoY to USD305m, led by 6% growth in volumes and continuously improving margins. Auto volumes grew 12% YoY, helped by ramp-up in China, boosting EBITDA per ton by 13% YoY (+2% QoQ) to USD383/t.
- South America reported very strong 17% YoY growth in volumes. This, coupled with operating leverage, led to EBITDA growth of 32% YoY to USD107m.
- EBITDA/t improved in Asia too on a higher share of auto from China plant.
- North America’s EBITDA/t was stable, while volumes grew 9% YoY.
- Europe benefitted from a stronger EUR.
Investing to capitalize on auto tailwinds
- 200kt auto line in the US is expected by 2020 at a capex of USD300m.
- EUR200m investment in Sierre, Switzerland to buyout leased auto-line from Constallium. The lease was to expire in 2019.
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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