Aluminium major Hindalco Industries is expected to report its December quarter results today, February 10. Brokerages expect consolidated profit to double driven by higher commodity prices and strong aluminium business.
However, operational revenue may decline on a year-on-year (YoY) basis, although its earnings before interest, tax, depreciation and amortisation (EBITDA) could see double-digit growth with strong margin expansion YoY in Q3 FY21.
"We estimate India EBITDA (standalone + Utkal) to grow 23 percent YoY on higher commodity prices and higher volumes in aluminium offset by lower volumes in copper," said Kotak Institutional Equities which sees 253 bps expansion in the margin.
The brokerage expects aluminium EBITDA (including Utkal) to increase 37 percent YoY due to higher volumes and higher aluminium prices. "We expect copper EBITDA to decline 33 percent YoY impacted by lower volumes offset by higher copper prices," it said.
According to Motilal Oswal, adjusted profit could grow 105.8 percent YoY. "Consolidated EBITDA may increase on improved LME aluminium prices, though the full benefit would not flow in due to 58 percent LME hedging. Novelis' EBITDA may increase 29 percent YoY on higher volumes."
Aleris acquisition with Novelis which was completed in April 2020, "is expected to generate synergies of around $150 million in the coming quarters, while Uktal Alumina capacity expansion of 500 KT is on track and is expected to be commissioned in Q4 FY21," said Narnolia Financial Services.
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