Hindalco Industries, a major aluminium producer, recently released its Q1 results, along with those of its subsidiary Novelis. Here's a breakdown of the key details from Hindalco Industries' Q1 report:
Hindalco Industries' Standalone Results:
- Net Profit Decline: The standalone net profit for Hindalco Industries witnessed a significant decline of 58.6%, amounting to ₹600 crore for the quarter ending June 2023. In the year-ago quarter, the net profit was reported at ₹1,448 crore.
Hindalco Industries' Consolidated Results:
- Net Profit Decline: On a consolidated basis, Hindalco Industries reported a 40.4% decrease in net profit, reaching ₹2,454 crore. This decline was compared to the same period of the previous year.
- Revenue from Operations: The company's revenue from operations experienced a nearly 9% year-on-year decline, amounting to ₹52,991 crore.
Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA):
- Consolidated EBITDA: The consolidated EBITDA for the quarter dropped by 46.7%, standing at ₹1,561 crore compared to ₹2,927 crore in the previous year's quarter. The EBITDA margin contracted significantly, reaching 7.8%, down from 15% in the same period of the previous year.
Novelis Q1 Results:
- Revenue Decline: Hindalco Industries' subsidiary, Novelis, reported a 14.4% decline in revenue for Q1, amounting to ₹33,606 crore compared to ₹39,289 crore in the same period of the previous year.
- EBITDA Decline: Novelis' EBITDA also witnessed a decline of 20.3%, reaching ₹3,456 crore from ₹4,334 crore in the previous year's quarter.
Hindalco Industries' subsidiary Novelis faced challenges such as lower average aluminium prices and subdued shipments, resulting in a decrease in revenue. However, Novelis' adjusted EBITDA improved due to a favourable product mix and better cost control.
The performance of Hindalco Industries' Aluminium and Copper business segments were as follows:
- Aluminium Business: Revenue in the Aluminium business segment declined by 8.2% to ₹10,499 crore. The Aluminium EBITDA plunged by 39% to ₹2,082 crore.
- Copper Business: Revenue from the Copper Business increased by 9.2% to ₹11,502 crore, while Copper EBITDA declined by 6% to ₹531 crore.
Despite the challenges, brokerages remained bullish on Hindalco Industries and raised its target price after better-than-expected earnings for the quarter. This was attributed to enhanced performance in the copper segment, improved aluminium operations, reduced expenses, and progress in enhancing Novelis' operations.
In summary, Hindalco Industries reported declines in net profit and revenue on both standalone and consolidated bases, with significant EBITDA decreases. Its subsidiary, Novelis, also faced revenue and EBITDA declines. However, the company's performance led to positive responses from brokerages, leading to raised target prices and favourable ratings.