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Motilal Oswal Report
Hindalco Industries Ltd.'s Novelis’ Q4 FY23 revenue was down 9% YoY but up 5% QoQ at $4.4b (8% above our estimate) driven by improved product mix and increased product pricing offset by lower volumes.
Adjusted Ebitda was down 6% YoY but up 18% QoQ at $403 million (11% below estimate). The miss was due to less favorable metal benefits from recycling, higher energy cost, inflationary pressure and lower volumes.
Ebitda/tonne was flat YoY but up 15% QoQ at $431 during the quarter. Adjusted profit after tax dipped 13% YoY but up 36% QoQ at $197 million, which was 20% above our estimate of $164 million, supported by lower tax outgo.
Shipments stood at 936 thousand tonne (down 5% YoY/up 3% QoQ), in line with our estimate of 975 kt. Shipments from North America / Europe / Asia /South America stood at 363 kt/248 kt/187 kt/144 kt (-4%/ +2%/ +33%/ -11% QoQ).
For FY23, Hindalco’s revenue stood at $18.5 billion (+8% YoY), Adjusted Ebitda came in $1.8 billion (-10% YoY) and adjusted profit after tax came in at $859 million (-9% YoY).
Volumes were down 2% YoY at 3.79 mt in FY23.
Management expects headwinds from destocking in beverage can vertical and softening in construction sector to continue for the next couple of quarters; however, we note that these are temporary headwinds that are not likely to dent the structural margin improvement trend of Hindalco.
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