Hindalco net halves on tax issue

Company's shares gain on operational improvement

Aluminium maker Hindalco Industries reported a standalone net profit of Rs 248 crore for the quarter ending March 2014, near half of the Rs 482 crore in the corresponding period of the previous year as a one-time loss of Rs 396 crore on tax issues shrunk net earnings.

As a result, the net profit missed the median of 22 analysts’ estimate of Rs 353 crore published by Bloomberg. Profit before tax and exceptional items were up 10 per cent year-on-year at Rs 598 crore. With its expanded capacities on stream, increase in depreciation and financing costs further shrunk net profit.

But the stock gained two per cent to Rs 149.2 on the BSE following the results, as the operations improved with a 31 per cent increase in Ebitda (earning before interest, taxes, depreciation and amortisation) to Rs 844 crore on a 21 per cent rise in revenue to Rs 8,435 crore. Analysts were expecting Ebitda at Rs 649 crore. For 2013-14, standalone net sales rose seven per cent to Rs 27,851 crore and Ebitda by 13 per cent to Rs 3,616 crore, driven by better performance of aluminium and copper businesses. Net profit fell 17 per cent to Rs 1,413 crore. Higher interest and depreciation costs meant profit before tax and exceptional items grew just two per cent.