Hindalco Q2 Results: Consolidated profit flat at ₹2,196 crore; Novelis on recovery path

Hindalco's operating profit, calculated as EBITDA, rose 27.5% to ₹1,756 crore during the period. The same was ₹1,377 crore in the year-ago quarter. The operating margin stood at 8.5%.

All the business segments of Hindalco experienced improved performance on a sequential basis. The copper business achieved its highest quarterly EBITDA of ₹653 crore, a 23% rise QoQ, driven by highest-ever metal shipments.

Its arm Novelis reported another quarter of sequential improvement in adjusted EBITDA and EBITDA per ton backed by higher shipments, largely from beverage cans. The subsidiary contributes to more than 70% of Hindalco's consolidated operating profit or EBITDA.

In the Indian Aluminum segment, the Upstream Business EBITDA was ₹2,074 crore, up 7% QoQ, and Downstream EBITDA was ₹171 crore, an increase of 16% QoQ due to higher shipments.

In a exchange filing, the company said that it has maintained a strong balance sheet and liquidity with a net debt-to-EBITDA ratio well below 2 times, positioning it well for organic growth.

"Hindalco continues to demonstrate Sustain-Ability, through a performance that is robust and consistent. We have maintained momentum driven by our focus on cost control and a solid performance by all our downstream segments," said Satish Pai, Managing Director, Hindalco Industries.

Brokerage house Equirus has maintained its 'Add' rating on Hindalco with a share price target of ₹535 for December this year. The brokerage has raised its EBITDA per tonne estimates for fiscal 2024 - 2026 by 5% to 8% in order to factor in a better-than-expected second-quarter.

While Nuvama has maintained its 'Hold' rating on Hindalco, the brokerage has raised its price target to ₹552 from ₹492 earlier. Nuvama has also raised its consolidated EBITDA estimates for financial year 2024 and 2025 by 7% and 1%, respectively.

Following the quarterly earnings, shares of Hindalco Industries Ltd climbed 0.093% to trade at ₹484.90 apiece on the NSE. The scrip is almost flat since the beginning of this year, while it has risen 16.60% in the last one year.