Hindalco Q4 profit dips 37% to ₹2,411 cr on macro-economic challenges

Aluminum major Hindalco Industries Ltd's consolidated net profit declined 37% year-on-year to ₹2,411 crore in the January-March quarter amid macro headwinds and higher input costs, though it surged 77% sequentially.

Its subsidiary Novelis delivered an improved performance with a net income of $175 million, though down 7% year-on-year but up 82% sequentially. Novelis’ revenue was $4.4 billion (vs $4.8 billion), down 8% YoY, impacted by lower average aluminum prices and subdued sales volume YoY.

The Hindalco stock dipped 0.89% today to ₹406.65 on the NSE. The stock has fallen 16.5% in the year-to-date period and 7.22% in the past six months.

Kumar Mangalam Birla-led Hindalco’s consolidated revenue for the fourth quarter stood at ₹55,857 crore (vs ₹55,764 crore), similar YoY and up 5% QoQ, on account of better realisations and volumes in India operations. Hindalco has reported an EBITDA of ₹5,818 crore (vs ₹7,597 crore) in Q4 FY23, down 23% YoY, which was impacted by higher input costs and unfavourable macros. On a sequential basis, EBITDA was up 48% driven by better performance of India's aluminum and copper business, and Novelis.

"Despite macro-economic headwinds, Hindalco maintained a strong balance sheet and liquidity position which helped the company keep the Net Debt to EBITDA ratio below 2x," the company informed via a stock exchange filing.

According to Satish Pai, managing director, Hindalco Industries, its diversified business model continues to drive resilient performance in challenging times. "Copper business delivered exceptional results, recording its highest-ever EBITDA, driven by robust market demand, stable operations, and higher value-added product sales. India's aluminum downstream business, which experienced its highest-ever EBITDA growth in FY23, reflects our strategic focus on enhancing this segment. Despite macroeconomic headwinds, Novelis has shown quarter-on-quarter recovery supported by improved product pricing and favourable product mix," he said.

Hindalco's aluminum (India) business recorded quarterly upstream revenue of ₹8,050 crore vs ₹9,253 crore in the prior year. Downstream revenue was ₹2,738 crore in Q4 FY23 vs ₹3,282 crore in the prior year period.

In copper, Hindalco recorded revenue of ₹11,206 crore, up 14% YoY, on account of higher global prices of copper and higher volumes, while EBITDA was at an all-time high of ₹598 crore vs ₹387 crore in Q4 FY22, up 55% YoY.

Hindalco's consolidated net debt to EBITDA stood at 1.39x as of March 31st, 2023 vs 1.36x as of March 31st, 2022.

As part of its full-year performance, Hindalco saw its revenue surging 14% year-on-year to ₹2,23,202 crore while its consolidated PAT dipped 26% to ₹10,097 crore. Consolidated EBITDA dipped 20% YoY to ₹24,131 crore. The company board has recommended a dividend of ₹3/share for FY23 vs ₹4/share for FY22.