(Bloomberg) -- Hindalco Industries Ltd., controlled by Indian billionaire Kumar Mangalam Birla, reported a drop in second-quarter profit, missing analysts' estimates, after a one-time loss partly eroded the benefits of a surge in global metals prices.
Net income was 3.93 billion rupees ($60 million) in the three months to Sept. 30, from 4.4 billion rupees a year earlier, India's biggest aluminum producer said in a statement Friday. That missed a 4.95 billion-rupee average of 14 analysts' estimates compiled by Bloomberg. The company took an exceptional charge of 1.06 billion rupees on legal cases relating to mining and transport taxes.
Aluminum has been the best performer this year in a broad advance that's lifted metal prices about a quarter, giving a boost to the earnings of producers. Rival Vedanta Ltd. reported a quarterly profit jump of 47 percent on Thursday and flagged a more robust second half.
The Mumbai-based company, which earns 50 percent of its revenue from aluminum and the rest from copper, saw its second-quarter sales rise almost 8 percent from a year earlier to 103.1 billion rupees, while costs increased 4.6 percent to 97.8 billion rupees, it said.
Hindalco expects government reforms to facilitate domestic investment and growth in the coming years, it said. The company will continue to focus on accelerated develeraging and it prepaid about 79.7 billion rupees of project debts so far in the current fiscal year, according to the statement.
Shares of Hindalco erased gains of as much as 2.6 percent on Friday after the earnings and traded 0.2 percent higher at 271.55 rupees in Mumbai. The stock has climbed 75 percent this year.
Novelis Inc., the U.S.-based unit of Hindalco, swung to a profit in the second quarter of $307 million from a loss of $89 million a year earlier, it said on Thursday. Novelis has raised its fiscal 2018 pre-tax earnings guidance and the company is “now actively seeking organic investment opportunities to further expand our leadership position in the growing automotive aluminum sector."
To contact the reporter on this story: Swansy Afonso in Mumbai at safonso2@bloomberg.net.
To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net, Liezel Hill, Tony Barrett
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