Hindalco to share Q4 results today. Profit may drop 35-43% YoY; all eyes on Novelis performance

Hindalco Industries is all set to announce its March quarter results on Wednesday. The aluminium maker had witnessed a margin pressure in December quarter primarily due to weak performance at Novelis. Analysts see a gradual recovery sequentially on the back of better volume, steady prices and lower cost. But year-on-year numbers are likely to be weak, with consolidated profit seen falling 35-43 per cent YoY on a flattish sales growth.

Elara Securities sees profit for the quarter at Rs 2,628 crore, down 34.90 per cent YoY over Rs 4,038 crore in the year-ago quarter. It sees sales at Rs 56,104 crore, up 0.6 per cent YoY.

"We expect Ebitda per tonne of India aluminium business and Novelis to rise in the range of 12-26 per cent QoQ. Overall, we expect consolidated Ebitda margin to contract 200 basis points YoY but improve 400 bps QoQ," it said.

Kotak Institutional Equities estimates India Ebitda to increase 26 per cent sequentially to Rs 2,360 crore (down 42 per cent YoY) while it sees Novelis’ Ebitda should see recovery at $420 per tonne, up 11.8 per cent QoQ (down 3.8 per cent YoY) after hitting a trough in Q3. This brokerage sees consolidated adjusted profit at Rs 2,329.60 crore, down 43 per cent. The brokerage pegs sales at Rs 52,784 crore, down 5 per cent YoY. Ebitda is seen falling 23 per cent to Rs 5,614 crore, due to weak earnings at Novelis.

Hindalco shares have fallen 16 per cent year-to-date. The stock is down 4 per cent in the last one month.

Brokerage ICICI Securities expects Hindalco's India operations (standalone operations + Utkal) to report a 54 per cent YoY drop in profit at Rs 917 crore on a 1 per cent drop in sales at Rs 19,423 crore. It expects Hindalco's domestic operations (standalone operations + Utkal) to report aluminium sales volume of 3,40,000 tonnes (3,49,000 tonnes in Q3) and copper volumes of 1,05,000 tonnes (1,09,000 tonnes in Q3).

"Ebitda margin is likely to come it at 12.9 per cent against 11.8 per cent in Q3FY23. The subsequent Ebitda of Hindalco's domestic operations is likely to come in at Rs 2,510 crore, up 9 per cent QoQ. Novelis is likely to report sales volume of 950 KT and Ebitda/tonne of $425 per tonne,' ICICI Securities said.

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