Crisil revises ratings outlook on Hindalco to stable from positive

Debt-funded Aleris purchase, likely moderation in operating profits amid Covid-19 could push up debt/EBITDA ratio


Crisil has revised the rating outlook on Hindalco Industries' long-term debt instruments to ‘stable’ from 'positive', on the back of likely increase in the company's financial leverage following the debt-funded $2.8 billion acquisition of Aleris Corporation by its subsidiary Novelis Inc. This, coupled with the moderation in operating profit in the wake of challenges in aluminium markets and the Covid-19 pandemic may take the consolidated net debt-to-EBITDA (earnings before interest, tax, depreciation, and amortisation) to above 3.5 times in fiscal 2021. ...