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Hindalco Q4 Preview | Profit may jump 209%, revenue 30-40% on commodity price surge

Moneycontrol logo Moneycontrol 26-05-2022 Gaurav Sharma
Hindalco Q4 Preview | Profit may jump 209%, revenue 30-40% on commodity price surge © Sunil Matkar Hindalco Q4 Preview | Profit may jump 209%, revenue 30-40% on commodity price surge

Hindalco Industries Limited (Hindalco) may report an on-year surge of 209 percent in its standalone net profit to Rs 2,030 crore for the quarter ended March 2022, according to a Moneycontrol poll.

The standalone revenue, however, is expected to increase 35 percent to Rs 19,470 crore aided by a sharp jump in the global commodity prices during the quarter.

The Aditya Birla Group-owned metals player had reported a standalone profit after tax (PAT) of Rs 653 crore during the same period last year when its standalone revenue reached Rs 14,471 crore.

For the quarter ended December 2021, the company had recorded a PAT of Rs 1,734 crore on a revenue of Rs 18,485 crore.

Experts believe that the rise in global commodity prices more than makes up for the increase in cost of production. Volumes are expected to remain flat or improve in mid-single digits for both the aluminium and copper businesses.

The volumes for the copper business are likely to remain flat on year and dip marginally on quarter to ~108 kilo tons while the aluminium volumes are likely to remain flat on year and improve 2 percent sequentially to 330 kilo tonnes.

Novelis is likely to report a 5-6 percent sequential increase in shipments at 975 kilo tonnes.

“We expect Hindalco's (including Utkal Alumina) EBITDA (earnings before interest, tax, depreciation and amortization) to increase by 10.5 percent QoQ to ~Rs 3,870 crore,” said a report from Centrum Institutional Research.

The brokerage expects the EBITDA from the aluminium segment to increase by 11 percent on-quarter to Rs 3,750 crore due to higher aluminium prices, which have gone up 8 percent QoQ to $ 3,659 per tonne. The rise in prices more than offsets the higher cost of production which is expected to increase by 9.5 percent on-quarter. Centrum expects the EBITDA/tonne of $1,478, improving by 7 percent QoQ.

EBITDA from the copper segment is expected to be down 2 percent QoQ at Rs 380 crore.

“We expect Novelis to report sales of 983 kilo tonnes, up 6 percent QoQ and EBITDA of $ 52 million, down 10.6 percent QoQ due to higher energy prices, supply disruption and lower auto volumes,” a report from Centrum said. It expects a EBITDA/tonne of $ 460, down 15.5 percent QoQ, for Novelis.

Motilal Oswal Financial Services, on the other hand, expects India Aluminum to report a per-tonne EBITDA of $ 1,580, while Copper business should report $ 423. It expects Novelis to report 5 percent QoQ increase in shipments at 975 kilo tonnes, with an EBITDA of $ 446/tonne.

Centrum pegs the company to report a PAT of Rs 1,947 crore for the reported quarter with an on year growth of 209 percent on revenue of Rs 19,493 crore, which are expected to increase by 34.6 percent on year.

Motilal Oswal on the other hand expect revenue to come in at Rs 20,560, registering a growth of 42.1 percent over the same period last year while generating a PAT of Rs 2,131 crore with an on year growth of 226 percent.

Kotak Institutional Equities has more conservative estimates for revenue as it expects the revenue to grow 26.9 percent year on year to Rs 18,361 crore. It expects a YoY surge of 208.8 percent in the net profit at Rs 2,016 crore.

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