Motilal Oswal's research report onHindalco
Novelis continued to improve its EBITDA even in the seasonally weakest quarter of the year. 3QFY18 adj. EBITDA increased 20% YoY to USD305m, led by 6% growth in volumes and continuously improving margins. Auto volumes grew 12% YoY, helped by ramp-up in China, boosting EBITDA per ton by 13% YoY (+2% QoQ) to USD383/t.South America reported very strong 17% YoY growth in volumes. This, coupled with operating leverage, led to EBITDA growth of 32% YoY to USD107m.
OutlookWe expect Novelis to leverage the Sierre plant to drive auto line growth in Europe.We believe Hindalco is striking a balance between growth and deleveraging to deliver shareholder returns. Maintain Buy.
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