Hindalco net up on higher aluminium prices on LME

Hindalco Industries, an Aditya Birla Group company, reported 25 per cent growth in net profit at ₹3,074 crore in the June quarter, against ₹2,454 crore logged in the same period last year, on back of sharp jump in aluminium prices on LME.

Revenue from operations increased 8 per cent to ₹57,013 crore (₹52,991 crore). EBITDA was up at ₹7,992 crore (₹6,109 crore).

The company has made a provision of ₹330 crore due to the damages at Novelis plant in Switzerland caused by unprecedented heavy rains. The Group expects to incur some additional costs related to repairs, clean-up and other costs until the operations are restored at the facility. The company will reverse the provision once it receives compensation from the insurance company.

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Satish Pai, Managing Director, Hindalco Industries, said the company benefited from operational efficiency and the sharp rise in aluminium prices on LME to $2,500 a tonne against $2,300 logged in the same period last year.

The copper business achieved its highest quarterly EBITDA driven by high domestic sales (especially downstream products), healthy by-product credits and better operational efficiencies following a successful planned shutdown, he added.

Though the ongoing war in West Asia will not have an impact on exports from India, he said shipments cost from Novelis to European countries have gone up substantially.

On the Supreme Court verdict allowing State governments to levy tax on mined ores, Pai said the Jharkhand government has levied a tax of ₹70 per tonne on bauxite and ₹100 a tonne on coal.

The cost of production will go up after the State government tax on mined ores though there will be no retrospective impact, he added.

However, Pai said the company sources only 10-12 per cent of its ores from the State.

Novelis IPO

On the possibility of reviving Novelis IPO, he said the market was not willing to give the kind of valuation the company was looking and hence the plans will be reviewed after getting the right premium.

The company had placed its bids for acquiring Hindustan Copper but the entire process was scrapped abruptly. Once the process is revived, Hindalco will look into it, he said.

Raising concern on increase in aluminium scrap imports, Pai said the company is working with Bureau of Indian Standards to frame an appropriate quality control on scrap shipments.

Besides the recent fall in LME aluminium prices, Hindalco expects the September quarter to be better in terms of demand for both aluminium and copper.