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Hindalco: Strong Performance at Operating Level - Views on News from Equitymaster
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Hindalco: Strong Performance at Operating Level
Feb 22, 2017

Hindalco Industries has announced the third quarter results of financial year 2016-2017 (3QFY17). While the topline increased by 14.5% YoY, the bottomline was in the positive and came at Rs 3.2 billion compared to a loss of Rs 327 million in 3QFY16.

Performance summary:
  • Income from operations increased by 14.5% YoY during 3QFY17. This is on the back of an increase of 15.2% YoY in net sales and a decrease of 32.2% YoY in other operating income. During the quarter, aluminium segment performed better than the copper segment. Volume in aluminium segment however, stood lower at 310 kt, as logistics constraints due to demonetization and delay in clearance of inventory at the port restricted goods movement. LME on the other hand has been favourable.
  • Operating profit increased by 77.5% YoY and operating margin stood at 12.7%. Aluminium and Copper segment EBITDA (operating profits) stood at Rs 8.8 billion (up 147% YoY) and 3.3 billion (down 6.4% YoY) respectively.
  • Other income increased by 19.9% YoY during the quarter.
  • The bottomline was in the green and stood at Rs 3.2 billion on the back of strong operating performance despite an increase depreciation and tax outgo.

    Financial Snapshot (Standalone)
    (Rs m) 3QFY16 3QFY17 Change 9mFY16 9mFY17 Change
    Total Income 81,373 93,136 14.5% 256,275 259,232 1.2%
    Total Expenses 74,618 81,283 8.9% 234,690 224,491 -4.3%
    Operating profit (EBITDA) 6,755 11,852 75.5% 21,585 34,741 61.0%
    Operating profit margin (%) 8.3% 12.7% 8.4% 13.4%
    Other income 1,834 2,200 19.9% 7,794 7,748 -0.6%
    Interest 5,852 5,879 0.5% 18,166 17,817 -1.9%
    Depreciation 3,120 3,580 14.7% 9,416 10,478 11.3%
    Profit before tax & exceptional items -383 4,593 1,797 14,194 689.7%
    exceptional items 0 849
    Tax -58 1390 271 4,506.70 1562.4%
    Net Profit before extraordinary Item -325 3,204 1,526 10,536 590.3%
    Extraordinary Items -3 2 -8 8
    Net Profit -327 3,206 1,518 10,544 594.5%
    Net profit margin (%) -0.4% 3.4% 0.6% 4.1%
    No. of shares (m) 2,065
    Basic diluted earnings per share (Rs) ^ 6.8
    P/E ratio (x) * 26.6

    * On trailing 12 month basis

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