Hindalco Q4 Review - Outlook Strong On Higher LME Prices: Motilal Oswal
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Motilal Oswal Report
Hindalco Industries Ltd.’s Q4 FY21 earnings for the India business was strong, as expected, with Ebitda up 23% QoQ to Rs 18.8 billion on higher London Metal Exchange prices.
Consolidated net debt declined Rs 64 billion QoQ to Rs 474 billion and net debt/Ebitda ratio declined to 2.6 times (versus a peak of four times post the Aleris acquisition).
Despite rising costs, we estimate India Ebitda/tonne in FY22E to be the highest ever in the last 10 years at $865/tonne.
We expect 35% earnings per share compound annual growth rate over FY21-23E, led by stronger LME prices and lower interest cost from deleveraging.
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