Views on Hindalco 3QFY2014 results - Angel Broking

Views of Mr. Bhavesh Chauhan (Sr. Research Analyst - Metals & Mining, Angel Broking) on Hindalco 3QFY2014 results:

Hindalco PAT above expectation

"Hindalco's standalone 3QFY2014 top-line and bottom-line were above our expectations due to better-than-expected performance from Copper segment. Its net sales increased 6.1% yoy to Rs. 7,201 (above our estimate of Rs. 6,775cr). Its aluminium production increased by 13.7% yoy to 158kt (including Mahan smelter production of 18kt) during the quarter. EBITDA increased 5.6% yoy to Rs. 630cr due to increase in profit from Copper segment. Copper segment EBIT grew by 33.2% yoy to Rs. 239cr and was ahead of our estimate. Other income increased by 17.4% yoy to Rs. 204cr. Excluding exceptional item of Rs. 144cr in 3QFY2013, its 3QFY2014 net profit increased by 15.4% yoy to Rs. 334cr (above our estimate of Rs. 224cr). The company's Aditya smelter (359kt) has commenced production during January 2014. Media reports suggest that Hindalco secured "Stage II" forest clearance from India's ministry of environment and forests (MoEF) for its Mahan coal block. This is structurally positive news for Hindalco as it will make its Mahan smelter cost-competitive once it commences production from this block. The next important stages would be signing of mining lease with the state government followed by mine development which could take two years. Hence, we are likely to have a positive stance on the stock."

Source : Equity Bulls

Keywords