09-Nov-2026 08:28:49
CITI on Hindalco ; Neutral, TP cut to Rs 1050
2Q consol EBITDA rose 42% yoy/ fell 8% qoq. India upstream: Rs70bn vs. Rs73.9bn in 1Q, India downstream: Rs3.3bn vs. Rs3bn, Copper: Rs16.7bn vs. Rs9.2bn, Novelis:Rs48.6bn vs. Rs48.8bn. India upstream EBITDA/t: $2,125 vs. $2,331 in 1Q, should decline (spot $3,050 vs. $3,227 in 1Q). Key highlights: (1) net D/EBITDA 1.8x vs. 1.95x, (2) Novelis insurance recovery at $1.3bn ($900m to date) out of $1.8bn, (3) India 2Q COP up 5%, 3Q to rise by another ~5% (costs should decline in 4Q), (4) FY28 hedge position: 26% at $3,168/t. Neutral, LME upside from spot likely limited (LME est CY27 $3,000, spot $3,070). Upsides such as (1) Bay Minette profitability, (2) India expansion, (3) captive coal, are back ended.
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