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In-line performance; muted Novelis performance offset by strong India business

Highlights of the consolidated result

* 3QFY25 consolidated net sales stood at INR584b (+11 YoY/flat QoQ), in line with our est. of INR595b, aided by better realization.

* Consolidated EBITDA stood at INR76b (+29% YoY/-4% QoQ), in line with our est. of INR77b, driven by lower costs and operating efficiencies.

* APAT stood at INR38b (+61% YoY/-12% QoQ), in line with our estimate.

* For 9MFY25, revenue stood at INR1736b (+9% YoY), EBITDA came in at INR230b (+34% YoY), and APAT was INR113b (+63% YoY).

* The net debt-to-EBITDA ratio rose to 1.33x in 3QFY25 from 1.19x in 2QFY25.

* Hindalco secured Meenakshi coal mines of 12mtpa, which will boost raw material securitization. The 25Kt copper inner grooved tubes (IGT) plant will be commissioned in 4QFY25. Aditya FRP project is expected to be commissioned in FY26, taking its total downstream capacity to 600Kt.

Aluminum (India)

* Upstream revenue stood at INR99.9b in 3QFY25 (+25% YoY), led by higher average aluminum prices.

* Aluminum upstream EBITDA stood at INR42.2b (+73% YoY; USD1,480/t), driven by lower input costs. EBITDA margins stood at 42% (vs. 31% in 3QFY24).

* Downstream revenue stood at INR32b (+25% YoY) on account of higher volume. Downstream aluminum sales stood at 99KT in 3QFY25 (+10% YoY) on account of market recovery.

* Downstream EBITDA stood at INR1.5b (+36% YoY) on account of a favorable product mix. EBITDA/t stood at USD179 (flat QoQ) in 3QFY25 as compared to USD146 in 3QFY24.

Copper business

* Copper business revenue stood at INR137b (+15% YoY) on account of higher average copper prices.

* EBITDA for the copper business was at INR7.8b, up +18% YoY.

* Copper metal sales were at 120KT (+1% YoY) in 3QFY25 and CCR sales were at 95KT (+1% YoY).

Novelis’ 3QFY25 performance

* Shipment volume stood at 904kt (-1% YoY/-4% QoQ) vs. our estimate of 910kt. The weakness in volume was primarily due to lower VAP and automotive shipments.

* Revenue stood at USD4.1b (+4% YoY/-5% QoQ), largely in line with our estimate of USD4.2b. Revenue was supported by higher aluminum prices.

* Adjusted EBITDA stood at USD367m (-19% YoY/-21% QoQ), below our estimate of USD428mn. This was primarily driven by higher aluminum scrap prices and an unfavorable product mix. EBITDA/t came in at USD406/t (vs. our est. of USD470/t) in 3QFY25. ? APAT stood at USD125m (-36% YoY/-38% QoQ) vs. our est. of USD154m.

* The current net debt-to-adj. EBITDA ratio stands at 2.9x vs. 2.5x in 2QFY25.

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