Hindalco Industries Ltd - The Aluminium Giant!
Here’s our analysis of Hindalco, it’s business, Novelis , aluminium future outlook, global factors, growth prospects, key risks and more!
A detailed thread below🧵👇🏻
#investing #StocksToBuy
Here’s our analysis of Hindalco, it’s business, Novelis , aluminium future outlook, global factors, growth prospects, key risks and more!
A detailed thread below🧵👇🏻
#investing #StocksToBuy
(1/24)
About-
Hindalco is the metals flagship company of the Aditya Birla Group. It is an industry leader in aluminium & copper. It is also among the leading players in the domestic non-ferrous industry with more than 40% share in flat rolled products (FRP) market.
About-
Hindalco is the metals flagship company of the Aditya Birla Group. It is an industry leader in aluminium & copper. It is also among the leading players in the domestic non-ferrous industry with more than 40% share in flat rolled products (FRP) market.
(2/24)
It’s business-
Here are the products it deals in-
1) Aluminium
2) Copper
3) Chemicals
4) Dry Cargo Handling
5) Fertilisers
6) Acids
It’s business-
Here are the products it deals in-
1) Aluminium
2) Copper
3) Chemicals
4) Dry Cargo Handling
5) Fertilisers
6) Acids
(3/24)
About Aluminium-
Aluminium is infinitely recyclable, highly durable metal.
Nearly 75% of all aluminum ever produced is still in use today. And producing aluminum from recycled inputs requires 5% of the energy
requirements.
Novelis recycled 74 bn beverage cans alone.
About Aluminium-
Aluminium is infinitely recyclable, highly durable metal.
Nearly 75% of all aluminum ever produced is still in use today. And producing aluminum from recycled inputs requires 5% of the energy
requirements.
Novelis recycled 74 bn beverage cans alone.
(4/24)
Aluminium Sector Overview-
. In CY21, the global production of aluminium grew by 4% YOY to around 67.5 mn tons while
the global consumption rebounded sharply by 9% to 68.5 mn tons.
This has resulted in a deficit of
1.1 million tons of aluminium in the global market.
Aluminium Sector Overview-
. In CY21, the global production of aluminium grew by 4% YOY to around 67.5 mn tons while
the global consumption rebounded sharply by 9% to 68.5 mn tons.
This has resulted in a deficit of
1.1 million tons of aluminium in the global market.
(5/24)
Aluminium prices averaged at over $3,000 a ton in the current quarter compared to an average of $2,648 per ton in Q3 calendar year 2021. sustained by global recovery, positive investor
sentiments, power shortages, production cuts and depleting global inventories.
Aluminium prices averaged at over $3,000 a ton in the current quarter compared to an average of $2,648 per ton in Q3 calendar year 2021. sustained by global recovery, positive investor
sentiments, power shortages, production cuts and depleting global inventories.
(6/24)
Domestic Aluminium Market-
The domestic sales of primary producers increased by around 10% YoY to 419 Kt this quarter
Govt spending on projects like AIIMS, Metro Stations, the IIT's,
Airports, Railway Stations, etc also resulted in the higher demand.
Domestic Aluminium Market-
The domestic sales of primary producers increased by around 10% YoY to 419 Kt this quarter
Govt spending on projects like AIIMS, Metro Stations, the IIT's,
Airports, Railway Stations, etc also resulted in the higher demand.
(7/24)
Hindalco’s performance-
It’s EBITDA for Indian Aluminium was at a record high of ₹3376 Crores up 131% YoY.
EBITDA margin was at 41% & is one of the best in the industry.
Aluminium metal sales were up 3% YoY whereas value-added product sales were up 8% YoY.
Hindalco’s performance-
It’s EBITDA for Indian Aluminium was at a record high of ₹3376 Crores up 131% YoY.
EBITDA margin was at 41% & is one of the best in the industry.
Aluminium metal sales were up 3% YoY whereas value-added product sales were up 8% YoY.
(8/24)
Hindalco acquired Hydro's high-end extrusion facility with a
capacity of 15 Kt at Kuppam, Andhra Pradesh. This product
portfolio at Kuppam will significantly enhance it’s capability in high-end extrusions.
Hindalco also renewed its 5.35 MT coal linkages with Coal
India.
Hindalco acquired Hydro's high-end extrusion facility with a
capacity of 15 Kt at Kuppam, Andhra Pradesh. This product
portfolio at Kuppam will significantly enhance it’s capability in high-end extrusions.
Hindalco also renewed its 5.35 MT coal linkages with Coal
India.
(9/24)
Novelis-
Novelis is the world's largest aluminum rolling company with 4MT of capacity. It is also the
global leader in aluminum recycling with around 2.5 MT recycling capacity.
It is the only aluminum FRP player with Can capable production across all 4 major continents.
Novelis-
Novelis is the world's largest aluminum rolling company with 4MT of capacity. It is also the
global leader in aluminum recycling with around 2.5 MT recycling capacity.
It is the only aluminum FRP player with Can capable production across all 4 major continents.
(10/24)
It’s business model-
Novelis participates and focuses on products which are premium in nature, thus helping them derive higher margins from such goods.
It’s key business lies in
1. Beverage Can
2. Automative Sheet
3. Aerospace Plate
4. Sheet in specialty products
It’s business model-
Novelis participates and focuses on products which are premium in nature, thus helping them derive higher margins from such goods.
It’s key business lies in
1. Beverage Can
2. Automative Sheet
3. Aerospace Plate
4. Sheet in specialty products
(11/24)
Beverage Can Business-
1. More adoption of Aluminium Beverage Cans across products like sparkling water, spiked seltzer, can cocktails or energy drinks.
2. Demand for aluminum beverage package is forecasted to grow at a very robust 3% to 5% over the next several years
Beverage Can Business-
1. More adoption of Aluminium Beverage Cans across products like sparkling water, spiked seltzer, can cocktails or energy drinks.
2. Demand for aluminum beverage package is forecasted to grow at a very robust 3% to 5% over the next several years
(12/24)
Aluminium Sheet in Cars-
Aluminum sheet is only a 2MT market vs an 80MT steel sheet market today. This highlights an opportunity for aluminum to continue to penetrate across vehicle structures & components.
Aluminum sheet is used in hoods, doors, fenders, body & wide.
Aluminium Sheet in Cars-
Aluminum sheet is only a 2MT market vs an 80MT steel sheet market today. This highlights an opportunity for aluminum to continue to penetrate across vehicle structures & components.
Aluminum sheet is used in hoods, doors, fenders, body & wide.
(13/24)
Novelis’s Growth Plan
Announced strategic growth capital projects totaling approximately $870mn to commence in this CY & begin commissioning in 2024
1. $375Mn investment to expand its rolling & recycling capabilities in Zhenjiang, China
Novelis’s Growth Plan
Announced strategic growth capital projects totaling approximately $870mn to commence in this CY & begin commissioning in 2024
1. $375Mn investment to expand its rolling & recycling capabilities in Zhenjiang, China
(14/24)
2. $130 mn investment at its New York, plant to debottleneck &
increase hot mill rolling capacity & enhance automotive sheet finishing capabilities.
3. $365mn, highly-advanced recycling center with recycling & sheet ingot casting capacity of 240 Kt in Kentucky, USA
2. $130 mn investment at its New York, plant to debottleneck &
increase hot mill rolling capacity & enhance automotive sheet finishing capabilities.
3. $365mn, highly-advanced recycling center with recycling & sheet ingot casting capacity of 240 Kt in Kentucky, USA
(15/24)
Novelis’s business performance-
1. Net sales in Q3 FY22 stands at $4.3Bn up 33% YoY driven by higher average aluminum prices
2. Better product pricing & favourable metal benefits helped mitigate the inflationary cost pressures & supply chain
disruption-related cost.
Novelis’s business performance-
1. Net sales in Q3 FY22 stands at $4.3Bn up 33% YoY driven by higher average aluminum prices
2. Better product pricing & favourable metal benefits helped mitigate the inflationary cost pressures & supply chain
disruption-related cost.
(16/24)
Hindalco’s ESG Strategy-
The Dow Jones Sustainability Index Ranked them as the Number 1 Aluminum Company.
In the Sustainability Yearbook of 2021, Hindalco has been Rated in the Gold Class Category compared to it’s competitors that are in the bronze class.
Hindalco’s ESG Strategy-
The Dow Jones Sustainability Index Ranked them as the Number 1 Aluminum Company.
In the Sustainability Yearbook of 2021, Hindalco has been Rated in the Gold Class Category compared to it’s competitors that are in the bronze class.
(17/24)
• Recycling content has increased significantly over the past decade, up 29 points from 30% to 59%, driving significant carbon reductions. But, they have also made great progress in other areas, whether it be energy reduction, water, or waste reduction.
• Recycling content has increased significantly over the past decade, up 29 points from 30% to 59%, driving significant carbon reductions. But, they have also made great progress in other areas, whether it be energy reduction, water, or waste reduction.
(18/24)
Specialty Alumina-
This is a mix of hydrate and alumina which are the intermediate products also for aluminum.
Hindalco is the only manufacturer of specialty alumina products in the country.
It is used in LEDs, advanced ceramics, electronics & lithium ion batteries.
Specialty Alumina-
This is a mix of hydrate and alumina which are the intermediate products also for aluminum.
Hindalco is the only manufacturer of specialty alumina products in the country.
It is used in LEDs, advanced ceramics, electronics & lithium ion batteries.
(19/24)
Flat Rolled Products (FRP)
In FRP, Hindalco is the only large-scale organized players in India, which is recognized by the customers for its quality products.
The global demand FRP are going to grow much-much faster than the other product segments of Hindalco.
Flat Rolled Products (FRP)
In FRP, Hindalco is the only large-scale organized players in India, which is recognized by the customers for its quality products.
The global demand FRP are going to grow much-much faster than the other product segments of Hindalco.
(20/24)
• In Q3FY22, India FRP Demand grew by 9% YoY. Sequentially, the demand grew by 17% QoQ due to seasonal impact
• Demand remains strong in packaging, consumer durables. B&C demand improved due to Government projects. However, auto sector faced some headwinds.
• In Q3FY22, India FRP Demand grew by 9% YoY. Sequentially, the demand grew by 17% QoQ due to seasonal impact
• Demand remains strong in packaging, consumer durables. B&C demand improved due to Government projects. However, auto sector faced some headwinds.
(21/24)
Key Risks-
1. Highly dependent on Macro factors like China’s Aluminium production, metal rally, inflation to name a few.
2. Rising crude oil and gas prices
3. Big Capacity Expansion plans while keeping an eye on organic growth will be interesting to see.
Key Risks-
1. Highly dependent on Macro factors like China’s Aluminium production, metal rally, inflation to name a few.
2. Rising crude oil and gas prices
3. Big Capacity Expansion plans while keeping an eye on organic growth will be interesting to see.
(22/24)
Shareholding:
As on Dec 2021
1. Promoter - 34.64%
2. FII - 25.99
3. DII - 21.17
4. Public - 17.85
5. Others - 0.34
Peers:
1. Vedanta
2. NALCO
3. Hindustan Copper
4. TATA Steel
Shareholding:
As on Dec 2021
1. Promoter - 34.64%
2. FII - 25.99
3. DII - 21.17
4. Public - 17.85
5. Others - 0.34
Peers:
1. Vedanta
2. NALCO
3. Hindustan Copper
4. TATA Steel
(23/24)
Conclusion-
Over the last decade, Hindalco has transformed itself from a company that was heavily dependent on the volatility of the LME to one that is a portfolio of stable & value-added earnings today.
It has delivered consistent profits, operational efficiency.
Conclusion-
Over the last decade, Hindalco has transformed itself from a company that was heavily dependent on the volatility of the LME to one that is a portfolio of stable & value-added earnings today.
It has delivered consistent profits, operational efficiency.
(24/24)
Do you think it is only riding the Aluminium wave Or there are more fundamental changes in this sector that’s upping the future outlook?
@caniravkaria @harshmadhusudan @ArjunB9591 @Jitendra_stock @AnishA_Moonka @ishmohit1
Comment down below!👇🏻
Do you think it is only riding the Aluminium wave Or there are more fundamental changes in this sector that’s upping the future outlook?
@caniravkaria @harshmadhusudan @ArjunB9591 @Jitendra_stock @AnishA_Moonka @ishmohit1
Comment down below!👇🏻
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