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Hindalco Industries Ltd.’s Q1 FY22 result for India business was strong as expected, with Ebitda up 29% versus QoQ to Rs 24.3bn due to higher prices on the London Metal Exchange.
Consolidated net debt increased Rs 45 billion (QoQ) to Rs 519 billion and net debt / Ebitda decreased 2.36 times (up from a high of four times after the Aleris acquisition).
We stick to our estimates and reiterate Hindalco as our best choice for non-ferrous metals.
Despite rising costs, we estimate that the Indian Ebitda / ton in FY22E at 959 USD / ton is the highest ever in the last 10 years.
We expect an average annual growth rate of 43% of earnings per share for FY21-23E, led by a stronger LME price and lower interest costs from deleveraging.
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Motilal Oswal Hindalco Industries Q1GJ22 Results Update.pdf
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