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    500440   INE038A01020

HINDALCO INDUSTRIES LIMITED

(500440)
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Hindalco Industries : reports record consolidated Q4 FY21 results on the back of improved macros and operational efficiencies

05/24/2021 | 06:20am EDT

Mumbai - Hindalco Industries Limited, the Aditya Birla Group metals flagship, today announced consolidated results for the quarter and year ended March 31, 2021.

The Company reported its best quarterly performance with consolidated PAT up 189 per cent at 1,928 crore, a nearly three-fold increase YoY. The results were driven by a strong performance by Novelis and India Aluminium Business, supported by higher volumes and better product mix, lower input costs, stability in operations and cost saving actions. The Copper Business recorded a 33 per cent jump in EBITDA sequentially in Q4 FY21 versus Q3 FY21 on account of stable operations. Novelis reported an all-time high EBITDA, as a result of continued demand for innovative, sustainable aluminium solutions and outstanding operational performance across its expanded business.

Commenting on the results, Mr. Satish Pai, Managing Director, Hindalco Industries Ltd., said, Commenting on the results, Mr. Satish Pai, Managing Director, Hindalco Industries Ltd., said, 'This past year, with all its volatility and uncertainty, has underscored Hindalco's resilience and ability to deal with challenges. Our record Q4 results have strengthened our balance sheet even further, absorbing the Aleris acquisition and restoring consolidated net debt to EBITDA ratio to pre-acquisition levels. The Aleris business continues to positively impact the overall top line and EBITDA. Through Q4, our India business continued to rise with demand higher than pre-Covid levels. Across the entire Hindalco family, we acknowledge the commitment and resilience of our employees, our own Covid warriors. Looking ahead, although FY22 has started with a second Covid wave in India, Hindalco is confident that our inherent strengths and tenacity will support us through it.'

Business Segment Performance in Q4 FY21 (vs Q4 FY20)

Novelis (including Aleris)

Novelis recorded its best-ever quarterly adjusted EBITDA of $505 million (vs $383 million), up 32 per cent YoY, on the back of higher organic volume, favourable metal benefits, and a US$60 million EBITDA contribution from the acquired Aleris business. Adjusted EBITDA per ton was at $514 in Q4 FY21 (vs $472/ton), up 9 per cent YoY. Novelis' Net Income (excluding tax-effected special items1) was at $172 million, up 12 per cent YoY, partially offset by higher depreciation and amortization associated with the acquisition of Aleris. Revenue was $3.6 billion (vs $2.7 billion), up 33 per cent YoY, due to higher shipments, global aluminium prices and market premiums. Total shipments of flat rolled products (FRPs) were at an all-time high of 983 Kt (vs 811Kt), up 21 per cent YoY, with the addition of the acquired Aleris business and strong demand across end-product markets.

Aluminium India

EBITDA was at an all-time high of 1,610 crore in Q4 FY21, compared with 1,043 crore for Q4 FY20, an increase of 54 per cent YoY, primarily due to favourable macros, better operational efficiencies and lower input costs. EBITDA margin of 27 per cent was the highest in the last 12 quarters and continues to be amongst the best in the industry. Revenue was 5,969 crore in Q4 FY21 vs 5,299 crore in the prior year period. Aluminium India Business recorded metal production of 316 Kt (vs 327 Kt last year). Aluminium metal sales were higher by 5 per cent YoY at 329 Kt (vs 314 Kt in Q4 FY20). Aluminium VAP (excluding wire rods) sales volumes were at a record high of 92 Kt (vs 76 Kt), up 21 per cent YoY, driven by a sharp recovery in the domestic market. VAP sales as a percentage of total metal sales reached an all-time high of 28 per cent this quarter vs 24 per cent in the same quarter last year.

Copper

Copper Cathode production was at 97 Kt in Q4 FY21 (vs 75 Kt in Q4 FY20), higher by 29 per cent YoY on account of stable operations during the quarter. While overall copper metal sales were at 107Kt (vs 86 Kt in Q4 FY20), Copper Continuous Cast Rod (CCR) sales in Q4 FY21 were in line with the same quarter last year, at 73 Kt. EBITDA for the Business stood at 269 crore compared to 406 crore in Q4 FY20. Revenue from the Copper Business was 8,508 crore this quarter, up 80 per cent YoY, primarily due to higher global prices of copper.

Fourth Quarter Consolidated Results

Hindalco reported its best-ever quarterly financial performance in Q4 FY21 with EBITDA at 5,597 crore (vs 4,216 crore), up 33 per cent YoY. The record results were driven by an outstanding performance by Novelis as well as India Aluminium business, supported by a sharp recovery in all relevant markets. Consolidated Revenue for the fourth quarter stood at 40,507 crore (vs 29,318 crore), up 38 per cent YoY. Consolidated PAT was 1,928 crore, compared to 668 crore in Q4 FY20, a jump of 189 per cent YoY. Gross Debt declined by 18,187 crore and Net Debt fell by 14,883 crore as of March 31, 2021 from its peak on June 30, 2020. Consolidated net debt to EBITDA ratio improved significantly to 2.59x on March 31, 2020, from a peak of 3.83x on June 30, 2020.

Covid Response

With the onset of the second Covid wave in India, Hindalco has strengthened efforts to protect employees across the ranks and to support the community.

Employee care: Hindalco has facilitated 20,000+ vaccinations, with 80 per cent of eligible employees and families vaccinated, including contract workers. Hindalco has enhanced medical coverage to cover all hospitalisation expenses of not only employees and families, but contract workers, 3rd party employees and their families. Ex-gratia benefits are being provided to support families of deceased employees (including contractual) for housing, medical, schooling and other expenses for the next few years.

Oxygen support: Novelis has donated 1,000 oxygen concentrators which have been distributed across locations. Hindalco has procured 1,500 oxygen cylinders and accessories which are being distributed to various hospitals and Covid care centres around its plant locations.

Hindalco is supplying oxygen from its plant at Dahej to hospitals in Gujarat daily, with 1,600 tons delivered already.

Hindalco has helped revive the defunct Karahiya oxygen plant in Uttar Pradesh resulting in 300 oxygen cylinders being supplied daily to hospitals in eastern parts of the state.

Business Updates & Recognition

Aleris Integration work continues with $79 million run-rate combination cost synergies achieved through the end of Q4FY21.

The ground-breaking for Novelis' new approximately $325-375 million Cold Mill project in Zhenjiang, China, is expected in mid-FY22.

Novelis' expansion of recycling, casting, and rolling facilities in Pinda, Brazil is on track, with commissioning expected by end of FY22.

The greenfield Guthrie, Kentucky automotive finishing plant in the U.S. and the automotive finishing line in Changzhou, China, were both commissioned and started commercial shipments in Q4 FY21.

Novelis successfully placed a 3.375 per cent, EUR500 million Senior Unsecured Green bonds in Europe for 8 years, due in 2029.

Novelis received credit ratings upgrades on its unsecured notes by both S&P Global Ratings and Moody's Investor Services in March 2021: Moody's Investor Services upgraded the corporate family rating of Novelis Inc. to Ba3 from B1

S&P Global Ratings raised their issue-level rating on Novelis' unsecured notes to 'BB-' from 'B+'

500 Kt Utkal expansion project is on track with mechanical completion by this quarter-end and commercial production to begin in Q2 of the current financial year.

Hindalco's Credit Rating Outlook upgraded from 'Stable' to 'Positive' while reaffirming the rating at 'AA' by CRISIL in April 2021.

Hindalco featured in the S&P Global Gold Class category as 'Sustainability Leaders of 2021' in the Dow Jones Sustainability Yearbook 2021.

About Hindalco Industries Limited

Hindalco Industries Limited is the metals flagship company of the Aditya Birla Group. An $18 billion metals powerhouse, Hindalco is the world's largest aluminium company by revenues, and a major player in copper. It is also one of Asia's largest producers of primary aluminium.

Guided by its purpose of building a greener, stronger, smarter world, Hindalco provides innovative solutions for a sustainable planet. Its wholly-owned subsidiary Novelis Inc. is the world's largest producer of aluminium beverage can stock and the largest recycler of used beverage cans (UBCs).

Hindalco's copper facility in India comprises a world-class copper smelter, downstream facilities, a fertiliser plant and a captive jetty. The copper smelter is among the world's largest custom smelters at a single location. Hindalco's global footprint spans 47 manufacturing units across 10 countries.

Contact:

Email: hindalco@adityabirla.com

Web: www.hindalco.com

Disclaimer

Statements in this 'Media Release' describing the company's objectives, projections, estimates, expectations or predictions may be 'forward looking statements' within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the company's operations include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the company's principal markets, changes in Government regulations, tax regimes, economic developments within India and the countries within which the company conducts business and other factors such as litigation and labour negotiations. The company assume no responsibility to publicly amend, modify or revise any forward looking statement, on the basis of any subsequent development, information or events, or otherwise.

(C) 2021 Electronic News Publishing, source ENP Newswire

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Financials
Sales 2021 1 299 B 17 456 M 17 456 M
Net income 2021 50 472 M 678 M 678 M
Net Debt 2021 540 B 7 252 M 7 252 M
P/E ratio 2021 18,6x
Yield 2021 0,42%
Capitalization 929 B 12 467 M 12 475 M
EV / Sales 2021 1,13x
EV / Sales 2022 0,84x
Nbr of Employees -
Free-Float 64,3%
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Number of Analysts 24
Last Close Price 417,45 INR
Average target price 466,00 INR
Spread / Average Target 11,6%
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Managers and Directors
Satish P. Pai Managing Director & Executive Director
Anil Kishan Kumar Malik President, Secretary & Compliance Officer
Praveen Kumar Maheshwari Chief Financial Officer & Director
Kumar Mangalam Birla Non-Executive Chairman
Pradip K. Banerjee Chief Technology Officer
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