Hindalco Q1 net profit tumbles 67% to Rs 107 crore

Higher power, depreciation, finance costs hurt company's bottomline

Hindalco Industries reported a lower-than-expected net profit at Rs 107 crore in the June quarter, down more than half of the bottomline recorded in the corresponding period last year mainly because of increased expenses and doubled finance costs even as net sales rose on a year-on-year basis.

Lower-than-expected net sales of the Aditya Birla Group company stood at Rs 8,573 crore in the period under review, up 7.2% from same period last year with higher contribution from its copper business. Revenues overall have moved up on year-on-year basis on the back of higher volumes despite lower commodity prices, said Hindalco in its release.

As per Bloomberg estimates, the company's net profit was seen at Rs 163 crore in the quarter gone by, while its topline was expected to be at Rs 8,968 crore.

Higher power and fuel costs along with increased depreciation in the June quarter led to increased total expenses on a year-on-year basis to Rs 8,029 crore, up 8%, in turn hurting the company's operating profit before other income and finance cost, which stood at Rs 545 crore, down nearly 3% from same period last year. Finance costs nearly doubled to Rs 601 crore in the period under review from Rs 337 crore in the corresponding period last year.

Finance cost and depreciation was higher given the additional capitalisation at both the greenfield smelter complexes-Aditya aluminium smelter and Mahan aluminium smelter, Hindalco Industries said.

The company's profit before interest, taxes, depreciation and amortisation rose 11% on a year-on-year basis to Rs 1,072 crore despite a lower other income which slipped due to lower yield and treasury corpus.