Despite short-term concerns, brokerages bullish on Hindalco

Hindalco's India business, including Utkal Alumina, reported good results for the January-March quarter of the financial year 2024-25 (FY25) and consolidated earnings before interest, taxes, depreciation, and amortisation (Ebitda) also rose.

- DEVANGSHU DATTA

Earnings growth was driven by favourable pricing, lower input costs and lower tax outgo for Novelis. The company's US-based aluminium rolling and recycling subsidiary, Novelis' performance rebounded in Q4. Copper Ebitda dropped 21 per cent quarter-on-quarter (Q-o-Q). Aluminium profitability is likely to decrease Q-o-Q in Q1FY26 due to lower aluminium prices. Novelis may be affected by the US tariffs.

Consolidated net sales were ₹64,900 crore, up 16 per cent year-on-year (Y-o-Y) and up 11 per cent Q-o-Q. Consolidated Ebitda stood at ₹8,840 crore (up 32 per cent Y-o-Y and up 17 per cent Q-o-Q). Adjusted PAT was ₹5,280 crore (up 66 per cent Y-o-Y and up 40 per cent Q-o-Q).

There was lower tax outgo at Novelis. In FY25, revenue was up 10 per cent Y-o-Y to ₹238,500 crore, while adjusted Ebitda rose 33 per cent and adjusted PAT increased 64 per cent Y-o-Y to ₹31,800 crore and ₹16,600 crore, respectively. Consolidated net debt to Ebitda ratio stood at 1.06x in Q4FY25, compared to 1.21x in Q4FY24.

Upstream aluminium revenue stood at ₹10,300 crore in Q4FY25 (up 22 per cent Y-o-Y), led by higher aluminium prices. Upstream Ebitda stood at ₹4,840 crore (up 79 per cent Y-o-Y). The upstream Ebitda margin was 47 per cent in Q4, compared to 42 per cent in Q3FY25.