Hindalco's revenue to double after 3 projects go on stream

Hindalco has a $100 foreign loan, impact of rupee devaluation to be marginal

Hindalco Industries stands to benefit from the weakening of the rupee against the dollar, as copper and aluminium prices are dollar-denominated, Chairman Kumar Mangalam Birla told shareholders at the company’s 54th annual general meeting on Tuesday.

“The only foreign loan we (Hindalco Industries) have is of $100 million and so the impact of rupee devaluation will be extremely marginal,” he said. In the year ended March, the company’s exports worth Rs 7,500 crore accounted for 30 per cent of total production. “To sell more in the domestic market was a conscious decision of the company,” Birla said.

Regarding its three new projects, the chairman said on their completion, Hindalco’s revenue would double to Rs 16,000 crore from Rs 8,000 crore at present and the earnings before interest, taxes, amortisation and depreciation would rise to Rs 6,000 crore from Rs 2,000 crore at present.

These projects are the Mahan aluminium smelter in Madhya Pradesh and Utkal alumina refinery and Aditya Aluminium smelter, expected to come up by December, in Odisha. Once these projects go on stream, the capital expenditure of the company will drop to Rs 2,000 crore in financial year 2015 and Rs 1,500 crore in the next, Birla said.

“The company is currently in transition and so the impact of expansion is being felt,” he said. Once the projects are commissioned, it will be one of the low-cost operations of the company, he added.