Hindalco - 4QFY2013 Result Review - Angel Broking

Hindalco's reported lower than expected performance on the profitability front due to lower than expected performance from Aluminium business. Hindalco's net sales declined 8.6% yoy to Rs. 6,916cr (in line with our estimate of Rs. 6,959cr) mainly on account of lower volumes. In aluminium segment, both alumina and aluminium production fell by 4.3% and 1.4% yoy to 330kt and 142kt respectively. Aluminium segment net sales declined by 4.1% yoy to Rs. 2,396cr mainly due to lower sales volumes. In copper segment, copper cathode production decreased by 10.9% yoy to 84.6kt and therefore the Copper segment net sales decreased by 10.6% yoy to Rs. 4,607cr.

On the operating front, aluminium segment EBIT decreased by 41.4% yoy to Rs. 284cr due to decrease in realizations coupled with increase in fuel and power costs and Copper segment EBIT also dipped by 11.8% yoy to Rs. 259cr. Overall, Hindalco's EBITDA declined by 25.6% yoy to Rs. 643cr and EBITDA margin slipped 213bp yoy to 9.3% during 4QFY2013. Interest expenses increased substantially by 96.9% yoy to Rs. 158cr on the back of new bonds raised during 1HFY2013. Other income was also higher by 44.0% yoy to Rs. 231cr. The tax rate for the company declined to 11.4% in 4QFY2013 compared to 17.9% in 4QFY2012. However, net profit declined by 24.7% yoy to Rs. 482cr (below our estimate of Rs. 528cr).

We maintain our Neutral rating on the stock.

Source : Equity Bulls

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