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Novelis reported 4Q adj. EBITDA of USD514mn, higher than JMfe of USD503mn. The company achieved a record EBITDA/t of USD540 during 4Q vs USD499/t in 3Q, higher than stated guidance of USD525/t. Key takeaways from the call are – 1) Company remains committed towards its earlier stated EBITDA/t guidance of ~USD525/t 2) No update on IPO at this stage 3) progressing well on projects, spent USD700mn on Bay Minette project so far, out of USD4.1bn total capex outlined 4) FY25 capex to be USD1.8-2.1bn 5) Bay Minette commissioning timeline continues to be calendar 2HCY26 ~1.5 year ramp up period likely 6) Net debt/EBITDA improved to 2.3x in Q4 from 2.7x in Q3; endeavour to maintain sub ~2.5x; FCF of USD400mn + in 4Q 7) Paid USD 100mn as dividend to parent during the year; 8- 10% of cash flow stated as dividend policy earlier. Hindalco, given ~70%+ steady/strong EBITDA being non-LME linked, remains our preferred play in the metal space. We upward revise our multiple/LME assumption to USD2.5k/t from USD2.4k/t earlier, leading to an upward revision in fair value. Maintain BUY.

* Higher shipments, lower realisation: : Net sales decreased 7% versus the prior year period to $4.1 billion for the fourth quarter of fiscal year 2024, driven by lower average aluminum prices, partially offset by higher total shipments. Total flat rolled product shipments increased 2% to 951 kilotonnes in the fourth quarter of fiscal year 2024 versus the prior year period, due primarily to increased demand for beverage packaging sheet.

* Adjusted EBITDA up significantly - higher than guidance: Net income attributable to common shareholder was up 6% versus the prior year to $166 million in the fourth quarter of fiscal year 2024, due primarily to higher Adjusted EBITDA, partially offset by higher taxes and unfavorable timing of unrealized derivative losses. Adjusted EBITDA increased 28% versus the prior year to $514 million in the fourth quarter of fiscal year 2024. This significant improvement was primarily driven by favorable metal benefit from recycling and lower operating costs than the prior year period.

* Full year FCF lower on high Capex: Adjusted Free Cash Flow was an outflow of $75 million in fiscal year 2024 compared to a prior year period inflow of $431 million, due primarily to a 73% year-over-year increase in capital expenditures, partially offset by higher cash flow from operating activities. Fiscal year 2024 capital expenditures total $1.4 billion and reflect the planned increase in strategic, sustainability-focused, capital investment projects that support increased long-term customer demand.

* Leverage abiding by targets: The company had a net leverage ratio (Net Debt / trailing twelve months (TTM) Adjusted EBITDA) of 2.3x at the end of the fourth quarter of fiscal year 2024. Total liquidity stood at $2.3 billion as of March 31, 2024, consisting of $1.3 billion in cash and cash equivalents and $1.0 billion in availability under committed credit facilities.

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SEBI Registration Number is INM000010361