Hin­dalco’s strong show­ing

Financial Chronicle - - RISING METTAL STOCKS -

HNDL con­tin­ued to de­liver su­perla­tive op­er­a­tional per­for­mance from do­mes­tic alu­minium busi­ness led by in­dus­try lead­ing cost po­si­tion­ing and op­ti­mum util­i­sa­tions, while Novelis’ per­for­mance im­proved ma­te­ri­ally and was best ever since Q2FY12 (EBITDA/t at US$370). We like HNDL on ac­count of i) strong earn­ings vis­i­bil­ity from low cost alu­minium as­set base with favourable coal sup­ply se­cured, ii) in­creased EBITDA con­tri­bu­tion from Novelis, iii) strong capex dis­ci­pline re­sult­ing in high FCF gen­er­a­tion and iv) re­lent­less fo­cus on re­duc­ing Net debt/EBITDA through ma­te­rial delever­ag­ing over FY18-19E.

Strong per­for­mance at alu­minium op­er­a­tions con­tin­ues; copper shines:

Stand­alone EBITDA at Rs1,350 crore, was marginally above our es­ti­mates, led by strong per­for­mance of the alu­minium di­vi­sion and solid growth in the copper di­vi­sion. The alu­minium di­vi­sion re­ported EBITDA of Rs 920 crore (up 78% YoY). The copper di­vi­sion re­ported EBITDA of Rs 500 crore, up 32% YoY.

Out­look. HNDL’s over­all alu­minium port­fo­lio CoP stands at the 11th per­centile in the global cost curve led by sharp cost re­duc­tion in sev­eral pre­vi­ous quar­ters and im­prov­ing coal avail­abil­ity sce­nario (~70% of coal re­quire­ment tied up through cap­tive/link­age) at com­pet­i­tive costs.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.