Beat on EBITDA driven by lower costs

Company
28 May 2024
5 Min read 
  • Nalco's 4QFY24 results update includes financials and valuations 
  •  Beat on EBITDA driven by lower costs 
  •  Consolidated revenue stood at INR36b (YoY/QoQ: -3%/+7%) 
  •  Consolidated EBITDA stood at INR11b (YoY/QoQ: +45% /+43%) 
  •  APAT for the quarter stood at INR6.8b (YoY / QoQ: +37% /+44%) 
  •  NACL reported a revenue of INR131.5b (-8% YoY) with an EBITDA of INR28.7b (+18% YoY) and APAT of INR16.7b (+16% YoY)
  •  Nalco's chemical business showed a robust performance 
  •  Revenue for the chemicals business declined 1% YoY to INR15.9b 
  •  EBIT for the vertical stood at INR5.3b (INR2.4b in 4QFY23) 
  •  For FY24, revenue stood at INR54.2b (down 3% YoY), while EBIT stood at INR9.7b (up 152% YoY)
  •  Revenue from the aluminum business was down 4% YoY to INR24.4b 
  •  Average realizations from the aluminum vertical witnessed a decline of 7% YoY to ~USD2,395/t 
  •  EBIT/t declined 9% YoY to INR4.7b
  •  Nalco's JV KABIL signed its first exploration and lithium mining agreement with Argentinas CAMYEN SE 
  •  NACL's participation will provide the necessary technical and operational experience for brine-type lithium exploration, exploitation, and extraction
  •  Utkal D coal block will fulfil ~25-28% of the coal requirements for the Angul smelter 
  •  EBITDA estimate increased by ~6% for FY25/FY26 
  •  NACL trades at 7.7x on EV/EBITDA and 2x on P/B 
  •  Reiterate Neutral rating on the stock with a revised TP of INR180 per share, valued at 7x on EV/EBITDA of FY26E
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