Hindalco - Higher LME Prices, Better Novelis Margins Drive Earnings Upgrade: Prabhudas Lilladher
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Prabhudas Lilladher Report
Hindalco Industries Ltd. reported Q4 FY21 Ebitda above our estimates by 12% due to 16% beat in aluminium division’s Ebitda, offset by 5% miss in copper business.
Led by strong visibility on profitability of Novelis’ operations, management reiterated guidance on sustainable Ebitda margins at $480-500/tonne.
Despite softness in auto volumes on shortage of semi-conductors, management guided margin of $500/tonne in Q1 FY22E.
Underpinned by strong profitability across the segments except aerospace, we expect company to meet its guidance of net debt/Ebitda at 2.5 times (Q4 FY21: 2.9 times) earlier than targeted timeline of FY23E.
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