Q2 Results: Hindalco’s Profit Rises 54% On Higher Operational Efficiency

Hindalco Industries Ltd.'s second-quarter net profit rose on higher operational efficiency, better realisation and lower interest expenses.

Hindalco's net profit, including that of its Utkal Alumina unit, rose 54 percent year-on-year to Rs 725 crore for the July-September period, the Aditya-Birla flagship company said in its exchange filing.

The company's revenue rose 5.4 percent on a yearly basis to Rs 10,833 crore. Revenue from its aluminium segment rose 17.6 percent over the last year to Rs 6,135 crore. The revenue from the copper business, however, declined nearly 7.6 percent year-on-year to Rs 4,710 crore.

The company attributed the decline in copper revenue to a maintenance shutdown at one of its smelters in July and lower realisations. The business environment was “challenged” by rising input costs and a surge in imports, it said in a separate statement.

Operating income, or earnings before interest, tax, depreciation and amortisation, rose 5 percent from the year-ago period to Rs 1,922 crore in the September quarter. The operating margin remained unchanged at 18 percent. This compares to street estimates of Rs 1,565 crore.

“One of the reasons for a jump in profit despite no change in operating margin can be contributions from Novelis acquisition,” Gaurang Shah, head-investment strategist at Geojit Financial Services Ltd., told BloombergQuint in an interaction. Hindalco purchased the Atlanta-based aluminum products maker in 2007. Novelis' profit for the quarter-ended September rose 56 percent on a yearly-basis to $116 million.

The Hindalco stock rose 4.2 percent to Rs 241.10 apiece after the earnings announcement.

Other Highlights

• Aluminium Ebitda rose 13 percent year-on-year to Rs 1,364 crore.
• Copper Ebitda fell 17 percent at Rs 388 crore.

(Updates an earlier version to remove estimates that were for Hindalco's standalone profit)