Hindalco Industries Q2FY21 results update.
Last updated: 11 Nov, 2020 | 12:44 pm
Net Profit: Hindalco declared a net profit of ₹ 387 crore, fall of 60% year-on-year, for the quarter ended September 2020. The reduction was attributable to a loss from running and divestiture of discontinued operations of ₹ 1,398 crore from Lewisport unit of Aleris. Profit from continued operations rose 83% year-on-year to ₹ 1,785 crore, driven by strong performance by Novelis, the U.S subsidiary and Indian aluminium business, cost saving initiatives and lower input costs.
Revenue and EBITDA: Revenue grew 5% year-on-year to ₹ 31,237 crore while EBITDA grew 32% year-on-year to ₹ 5,171 crore. Margins increased to 16.5% from 13.2%.
Debt to EBITDA ratio: This ratio reflects the amount of income before covering taxes, interest, depreciation, and amortization available to pay down the debt. The ratio reduced to 3.52 times from 3.83 times last quarter showing strengthening financials and capital structure.
Business Segment Performance:
- Novelis: The U.S. subsidiary reported an all time high operating profit of $455 million, up 80% QoQ, attributable to higher volumes and EBITDA contribution from acquired Aleris business. Novelis reported a Net Income of $ 158 million for the quarter and a $3 billion in revenue. Shipments were at 923 Kt, up 19% quarter-on-quarter on back of revival of demand across segments.
- Aluminium India: EBITDA grew 25% quarter-on-quarter to ₹ 1,066 crore on account of favourable macros. EBITDA margin of 22% was one of the best in the industry. Revenue grew 8% quarter-on-quarter to ₹ 4,796 crore attributable to higher aluminium prices. Aluminium production was at 303 Kt for the quarter.
- Copper: Copper Cathode production was at 73 Kt, up 76% quarter-on-quarter as a result of ramping up of operations. EBITDA was up to ₹ 208 crore, as against 37 crore last quarter while revenue was up 58% to ₹ 4,774 from last quarter.
Expansions:Utkal Alumina's Capacity expansion of 500 Kt is expected to be commissioned in Q4FY21, with the refinery recording highest production of 441 Kt in this quarter.
Expansion plans in Brazil to support beverage can business of Novelis is expected to be commissioned in FY22.
Hindalco ended day’s trade at ₹ 204.05, up 6.08% from previous close. Hindalco witnessed sharp recovery of demand to near pre-Covid levels in India aluminium and copper businesses while Novelis posted a record operating profit , further solidifying the volumes, cost control measures and the product mix.