{"id":156110,"date":"2023-11-10T09:58:15","date_gmt":"2023-11-10T14:58:15","guid":{"rendered":"https:\/\/44.250.171.167\/?p=156110"},"modified":"2023-11-10T09:58:16","modified_gmt":"2023-11-10T14:58:16","slug":"hindalco-industries-ltd-q2-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/hindalco-industries-ltd-q2-fy24-earnings-conference-call-insights\/","title":{"rendered":"Hindalco Industries Ltd Q2 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Hindalco Industries Ltd (HINDALCO) Q2 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Financial Performance<\/strong>\n<ul>\n<li>Consolidated Q2 revenue rose 2% sequentially to INR54,169 crores.<\/li>\n<li>Consolidated EBITDA increased 14% QoQ to INR6,896 crores.<\/li>\n<li>Novelis, India aluminum downstream, and copper business recovered strongly.<\/li>\n<li>Consolidated PAT declined 11% sequentially to INR 2,196 crores.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Novelis Performance<\/strong>\n<ul>\n<li>Novelis Q2 shipments rose 6% QoQ to 933 kt on higher beverage can volumes.<\/li>\n<li>EBITDA increased 15% YoY to $484 million on higher volumes and scrap usage.<\/li>\n<li>EBITDA per ton rose 8% sequentially to $519.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Copper Business Performance<\/strong>\n<ul>\n<li>Strong Q2 performance driven by higher volumes of copper cathodes and rods.<\/li>\n<li>Also benefited from byproduct credits like gold, silver, sulfuric acid.<\/li>\n<li>But will moderate to INR500-550 crores EBITDA per quarter going forward.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Aluminum Business Costs<\/strong>\n<ul>\n<li>Coal costs down 15% QoQ in Q2, costs of production down 6%.<\/li>\n<li>Seeing some upward pressure in coal costs in Q3 but other costs trending down.<\/li>\n<li>Guiding for flattish costs of production in Q3 versus Q2.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Aluminum Price Outlook<\/strong>\n<ul>\n<li>Demand in China remains steady, in significant deficit.<\/li>\n<li>Macro environment sensitivity causing price volatility.<\/li>\n<li>Sticking to price outlook of $2100-2300 per tonne, expect upside if macros improve.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Aluminum Hedging Strategy<\/strong>\n<ul>\n<li>Not taking forward positions given price outlook positivity.<\/li>\n<li>Hedged 5% for FY25 using zero collar strategy.<\/li>\n<li>Collar has floor at $2200 per tonne and ceiling at $2517 per tonne.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Alumina Sales<\/strong>\n<ul>\n<li>Sold 138 kt of alumina in Q2.<\/li>\n<li>Will see higher 3rd party sales in coming quarters.<\/li>\n<li>As 350 kt brownfield expansion at Dahej onstream.<\/li>\n<\/ul>\n<\/li>\n<li><strong>New Alumina Refinery Project<\/strong>\n<ul>\n<li>Planning 2 mtpa alumina refinery in Odisha in two 1 mtpa phases.<\/li>\n<li>First phase capex slightly below INR 6000 crores, to be completed in 36 months.<\/li>\n<li>Secured bauxite supply from Odisha government, have land and clearances.<\/li>\n<li>Plan to sell alumina in third party market currently.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Coal Sourcing<\/strong>\n<ul>\n<li>Linkage coal was 53% of mix in Q2, e-auction 40%, own mines 5%.<\/li>\n<li>Good materialization of linkages at 90% enabled lower costs.<\/li>\n<li>Power demand increased recently, impacting October costs.<\/li>\n<li>Guiding for flat aluminum production costs in Q3 vs Q2.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Coal Mine Update<\/strong>\n<ul>\n<li>Chakla coal mine on track for October 2024 box cut.<\/li>\n<li>Won adjacent Meenakshi West mine, awaiting clearances for Meenakshi.<\/li>\n<li>If both secured, will take call on optimizing usage.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Alumina Strategy<\/strong>\n<ul>\n<li>Going long on alumina due to attractive regional market.<\/li>\n<li>Focusing on Middle East smelters within regional proximity.<\/li>\n<li>Securing bauxite supply to support refinery expansions.<\/li>\n<li>Returns are healthy based on index-linked pricing to LME.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Utkal Alumina Refinery<\/strong>\n<ul>\n<li>Currently operating Utkal refinery at 2.5 mtpa capacity.<\/li>\n<li>Expanding further would deplete Baphlimali bauxite mine reserves fast.<\/li>\n<li>Therefore, new Odisha alumina project to preserve Baphlimali life and secure additional bauxite source for the long term.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Coal Linkage Auctions<\/strong>\n<ul>\n<li>Secured Tranche 2 &amp; 3 of expired linkages in previous auctions.<\/li>\n<li>Now focused on renewing Tranche 4 expiring in January 2023.<\/li>\n<li>Tranche 4 is another 3 mt, auction process ongoing.<\/li>\n<li>Managed to renew prior tranches at moderately higher prices<\/li>\n<\/ul>\n<\/li>\n<li><strong>Mark-to-market Losses<\/strong>\n<ul>\n<li>MTM losses of INR 2272 crores on cash flow hedges.<\/li>\n<li>For LME, currency and commodity hedges undertaken.<\/li>\n<li>Includes hedges by both India and Novelis operations.<\/li>\n<li>No P&amp;L impact currently, can change next quarter.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Capex Spending<\/strong>\n<ul>\n<li>Novelis FY23 capex revised down to $1.5-1.8 billion, at lower end of range.<\/li>\n<li>India FY23 capex INR4,000-4,500 crores. FY24 guidance will come in February.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Hindalco Industries Ltd (HINDALCO) Q2 FY24 Earnings Concall Financial Performance Consolidated Q2 revenue rose 2% sequentially to INR54,169 crores. Consolidated EBITDA increased 14% QoQ to INR6,896 crores. Novelis, India aluminum downstream, and copper business recovered strongly. Consolidated PAT declined 11% sequentially to INR 2,196 crores. Novelis Performance Novelis Q2 shipments rose 6% [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,5753],"tags":[10169,9885],"class_list":["post-156110","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-industrials","tag-earnings","tag-iron-and-steel"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":166997,"url":"https:\/\/alphastreet.com\/india\/hindalco-q3-2024-2025-call-highlights-coal-strategy-alumina-expansion-strategic-expansion-plans\/","url_meta":{"origin":156110,"position":0},"title":"HINDALCO Q3 2024-2025 Call Highlights: Coal Strategy, Alumina Expansion &#038; Strategic Expansion Plans!","author":"Praveen","date":"February 20, 2025","format":false,"excerpt":"Hindalco Industries Ltd., an Indian aluminium and copper manufacturing company, and a subsidiary of the Aditya Birla Group, in its Q3 earnings call outlined major expansion plans including the Meenakshi mine acquisition, potentially reducing coal costs by 30%, INR40,000 crore investment in India, and Novelis's $6 billion three-year CapEx. Key\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2024\/07\/CC_Image_8.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2024\/07\/CC_Image_8.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2024\/07\/CC_Image_8.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2024\/07\/CC_Image_8.jpg?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":172266,"url":"https:\/\/alphastreet.com\/india\/hindalco-industries-q2-fy26-earnings-results\/","url_meta":{"origin":156110,"position":1},"title":"Hindalco Industries Q2 FY26 Earnings Results","author":"Divyansh_Kasana","date":"November 10, 2025","format":false,"excerpt":"Hindalco Industries Ltd, a flagship company of the Aditya Birla Group, is a leading producer of Aluminium and Copper and manufacturer of aluminium sheets, extrusions, and light gauge products for packaging markets. 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