Hindalco falls 2% on weak Q4 numbers; brokerages blame weak aluminium prices for for poor show

CLSA said that the outlook for the company's business in the domestic market is muted due to weak aluminum prices.

Shares of Hindalco Industries fell more than 2 percent intraday on May 17 after the company reported a 17.9 percent YoY decline in profit for the quarter ended March 2019 at Rs 506 crore, compared to Rs 616 crore in the year-ago period.


The revenue of the Aditya Birla Group company was up 6.6 percent at Rs 12,455 crore, compared to Rs 11,687 crore in the year-ago period.

The reported numbers include Q4 results of Utkal Alumina, a fully-owned subsidiary of Hindalco.

Brokerage firm CLSA maintained its sell recommendation with a target price of Rs 180 per share.

The brokerage said Hindalco's Q4 numbers were weak for the Indian market, but it showed decent performance from Novelis.

It added that the outlook for the company's business in the domestic market is muted due to weak aluminum prices.

"See a 7-14 percent YoY fall in FY20 EBITDA," said CLSA.

Morgan Stanley, on the other hand, retained 'equal-weight' rating on the stock with a target price of Rs 211.

The brokerage said aluminum segment EBITDA was below estimates on higher costs but the balance sheet has improved in FY19 and the expansion of projects are on track.

At 1151 hrs, Hindalco Industries was quoting Rs 190.05, down 2.36 percent on the BSE.

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