Hindalco’s earnings for the quarter ended December 2018 were impacted by subdued demand domestically and globally.

While domestic demand was effected by increased imports, global demand and prices were influenced by the moderate demand from the world’s largest consumer of metals, China, and the ongoing US-China trade tensions.

While the company managed to improve its revenues by focussing on value-added products, increased costs played spoilsport.

The volume sales of aluminium by the company came down marginally by 0.6 per cent YoY to 323 kt (kilo tonne) in the latest December quarter, due to an increase in imports and weak demand globally.

However, the revenues from the segment increased 12 per cent YoY on the back of improved realisations. But this failed to translate into a similar growth in earnings due to higher costs.

The operating profits from the aluminium segment fell 45 per cent YoY.

The copper segment that contributed nearly 45 per cent to the operating profit of the company in the December quarter was also impacted due by uncertainties in the global market.

However, Hindalco managed to increase its revenues by 4 per cent YoY, despite fall in volumes (3 per cent) and LME prices (9 per cent YoY). This was on account of increased focus on value added products (VAPs) — the share of CC rods in sales went up to 58 per cent in the December quarter from 40 per cent last year.

But the increase in operating profit (up 2.3 per cent YoY) was subdued on account of higher raw material costs.

Novelis revenues

Revenues from Novelis (the company’s US subsidiary) grew by 3 per cent to $3 billion, driven by improved realisations, higher shipments and a favourable product mix.

The operating profit per tonne increased from $383 per tonne a year ago to $403 per tonne during the December 2018 quarter on account of increased efficiencies and effective cost management.

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