Hindalco - March 2013 Results Preview - Motilal Oswal

- Net sales to grow 5% QoQ: We expect net sales to grow 5% QoQ (down 5% YoY) to INR72.3b due to higher volumes in both aluminum and copper segment. Aluminum sales volume is expected to increase 8% QoQ, while copper sales volume is likely to grow 3% QoQ. HNDL's blended realization for aluminum is likely to increase 1% QoQ to INR165,778/ton due to similar increase in LME prices. We expect Novelis shipments to increase 16% QoQ to 750kt, while operating margins to improve 21% QoQ to USD345/ton. In 3QFY13, Novelis margins and shipments were affected due operational hiccups in ERP implementation.

- Standalone EBITDA to grow 8% QoQ: We expect standalone EBITDA to grow 8% QoQ to INR6.3b on a lower base of 3QFY13.

- Maintain Buy: We expect cons PAT to post a CAGR of 5% over FY12-15E to INR39.6b, driven by 13% CAGR growth in aluminum sales (India) to 800kt due to Mahan coal block commissioning and 5% CAGR volume growth at Novelis. The stock trades at 4.4x FY15E EPS and at an EV of 5.3x FY15E EBITDA. Maintain Buy.

Source : Equity Bulls

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