Hindalco Q4FY23 PAT down 37.4% yoy at Rs2,411cr on weak operating profits from aluminium upstream

Hindalco Industries Ltd reported flat 0.17% growth in sales revenues for the March 2023 quarter on consolidated basis at Rs55,857 crore. Revenues were up sequentially by 5.09%. For the quarter, Novelis sales were flat yoy at Rs36,176 crore while aluminium upstream saw sales lower at Rs8,050 crore on weak prices. Downstream aluminium also reported lower revenues. However, in terms of operating profits, Novelis was slightly better, but upstream aluminium felt most of the pressure.

The pressure was  more in the India business than in the Novelis business. For instance, Novelis adjusted EBTIDA per tonne was just 1% lower at $431. However, the consolidated EBITDA at Rs5,818 crore was down 23% yoy on account of inventory related losses in the domestic upstream aluminium business. For FY23, the consolidated EBITDA per tonne at Rs24,131 was 20% lower yoy. Copper reported record EBITDA in the quarter and FY23.

Financial highlights for Mar-23 compared yoy and sequentially

 Hindalco Ltd

Rs in CroreMar-23Mar-22YOYDec-22QOQ
Total Income (Rs cr)₹ 55,857₹ 55,7640.17%₹ 53,1515.09%
Operating Profit (Rs cr)₹ 6,216₹ 7,516-17.30%₹ 5,14220.89%
Net Profit (Rs cr)₹ 2,411₹ 3,851-37.39%₹ 1,36277.02%
      
Diluted EPS (Rs)₹ 10.83₹ 17.30 ₹ 6.13 
OPM11.13%13.48% 9.67% 
Net Margins4.32%6.91% 2.56% 

 

For the fourth quarter, net profits were down -37.4%, while operating profits were down -17.3%. Hindalco achieved highest ever Copper EBITDA at Rs598 crore in the fourth quarter. To an extent, the diversified model of Hindalco has helped it manage in rather tough times when demand was weak and costs were still rising. The company has net debt to EBITDA of 1.39X compared to 1.36X in the previous year.

The net margins fell in the quarter from 6.91% to 4.32% on a yoy basis in the fourth quarter of the fiscal year FY23, as did the operating margins. However, net margins and operating margins were higher on a sequential basis. The board has recommended final dividend of Rs3 per share on a face value of Rs1 per share. This is Rs1 lower than previous year.

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