Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.

Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Hindalco: Experience showing - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • Jan 30, 2002

    Hindalco: Experience showing

    At time of the second quarter earnings, 'Fighting hard' is what we said Hindalco Industries Ltd. (HIL) was doing to beat the slowdown. Those efforts seem to be yielding results for the A.V. Birla group flagship company. Turnover have been climbing over the past three quarters. Also, YoY sales growth has been improving over the concerned quarters.

    (Rs m) 3QFY01 3QFY02 Change 9mFY01 9mFY02 Change
    Net Sales 5,611 5,774 2.9% 16,771 16,837 0.4%
    Other Income 393 543 38.2% 1,029 1,307 27.0%
    Expenditure 3,029 3,350 10.6% 8,847 9,359 5.8%
    Operating Profit (EBDIT) 2,582 2,424 -6.1% 7,924 7,478 -5.6%
    Operating Profit Margin (%) 46.0% 42.0%   47.2% 44.4%  
    Interest 163 139 -14.7% 492 345 -29.9%
    Depreciation 357 393 10.1% 1,064 1,137 6.9%
    Profit before Tax 2,455 2,435 -0.8% 7,397 7,303 -1.3%
    Tax 804 780 -3.0% 2,440 2,365 -3.1%
    Profit after Tax/(Loss) 1,651 1,655 0.2% 4,957 4,938 -0.4%
    Net profit margin (%) 29.4% 28.7%   29.6% 29.3%  
    No. of Shares 74 74   74 74  
    Diluted Earnings per share 88.7 88.9   88.8 88.4  
    P/E Ratio   7.7     7.8  

    The performance is commendable considering the difficult operating environment. Average prices of aluminium on the LME weakened by 16% in the quarter ended December '01 compared to the same quarter in the previous year. Further, weakness in the global and domestic economy resulted in a subdued demand environment. That said, sales in 3QFY02 have increased led by a 5.1% increase in volumes. This is contrary to last quarter when volumes declined and realisations improved. This change in QoQ performance could be due to higher sale of primary and semi-fabricated products. Exports markets continue to remain weak with slide in volumes and realisations.

    While realisations declined, the company could not cut back on costs, which have eaten into operating margins. OPM has declined by 4 and 2.8 percentage points, YoY, during the quarter and 9 months ended December '01. The improved sale volumes from higher production led to higher operating costs. This could indicate that raw material costs have not declined commensurate to the drop in aluminium prices. Also, manufacturing costs have increased due to higher power costs. Power cost is among the largest constituents of operating expenses in production of primary metal.

    The company continues to reduce interest expense. Interest costs, YoY, have reduced in all the quarters of the current fiscal. This could be due to the ongoing initiative of re-financing debt to take advantage of the low interest rate regime. Other income has increased on the back of dividends from Indal. Also, investments in debt markets have generated good returns with yields declining.

    At Rs 686, the scrip trades on a multiple of 7.8x 9mFY02 annualised earnings. With rise in aluminium prices and indications of a pick up in the domestic economy, valuations of the counter have increased over the past quarter.



    Equitymaster requests your view! Post a comment on "Hindalco: Experience showing ". Click here!


    More Views on News

    Hindalco: Strong Performance at Operating Level (Quarterly Results Update - Detailed)

    Feb 22, 2017

    Hindalco Industries has reported a 14.5% YoY increase in the topline while the bottomline came at Rs 3.2 billion.

    Hindalco Industries: Strong Operational Performance Boosts Profitability (Quarterly Results Update - Detailed)

    Nov 30, 2016

    Hindalco Industries has reported a 1.1% YoY increase in the topline while the bottomline has accelerated by 255.4% YoY.

    Hindalco Industries: Cost Efficiency Boosts Profitability (Quarterly Results Update - Detailed)

    Aug 18, 2016

    Hindalco Industries has reported a 11.4% YoY decline in the topline while the bottomline has accelerated by 379% YoY.

    Hindalco Industries: A Stellar performance (Quarterly Results Update - Detailed)

    Jun 6, 2016

    Hindalco Industries has reported a 7.5% YoY decline in the topline while the bottomline has accelerated by 123.4% YoY.

    Hindalco Industries: Realisations Hurt Topline (Quarterly Results Update - Detailed)

    Feb 17, 2016

    Hindalco Industries has reported a 5.3% decline in topline while the bottomline has declined by 88.7%

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms


    Aug 18, 2017 (Close)


    • Track your investment in HINDALCO with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks


    Detailed Financial Information With Charts