Hindalco Industries extends fall after SC verdict on coal blocks

Hindalco Industries lost 8.35% to Rs 143.25 at 12:35 IST on BSE, with the stock extending Wednesday's decline following the Supreme Court verdict on coal blocks.

Meanwhile, the S&P BSE Sensex was down 127.84 points or 0.48% at 26,616.85

On BSE, so far 9.61 lakh shares were traded in the counter as against average daily volume of 9.84 lakh shares in the past one quarter.

The stock hit a high of Rs 155.50 and a low of Rs 142.80 so far during the day. The stock had hit a 52-week high of Rs 198.70 on 25 July 2014. The stock had hit a 52-week low of Rs 96.95 on 24 February 2014.

The stock had underperformed the market over the past one month till 24 September 2014, falling 14.14% compared with 1.23% rise in the Sensex. The scrip also underperformed the market in past one quarter, falling 6.29% as against Sensex's 5.42% rise.

The large-cap company has equity capital of Rs 206.49 crore. Face value per share is Re 1.

Shares of Hindalco Industries fell 0.48% to Rs 156.30 after the Supreme Court in its verdict announced on Wednesday, 24 September 2014, scrapped 214 out of 218 coal blocks allocated between 1993 and 2010 it had already declared illegal due to irregularities in the allocation of the blocks. The four coal blocks which are exempt from the verdict are run by the Central government with no joint venture with the private sector.

Meanwhile, the Supreme Court in its final verdict has given six months' breathing time for the operational blocks to wind up operations. As per the order, allottees will have to pay a fine of Rs 295 per tonne from the time the coal was mined.

As per reports, Hindalco Industries will lose three coal blocks, which includes the operational block Talabira I, and non-operational blocks Mahan and Talabira II. Also the company would have to fork out Rs 500 to Rs 600 crore as fine. Reports indicated that the company's future profitability would take a hit as the company would have to substitute captive coal with imported coal, which is about four times more expensive. Hindalco Industries had imported 300,000 tonne of coal in the year ended 31 March 2014, the report added.

A bench headed by Chief Justice R M Lodha last month had held that all coal blocks allocations since 1993 by various regimes at the Centre have been made illegally and arbitrarily. However, it had stopped short of cancelling them saying, what the consequences will be is the issue which remains to be tackled.

Shares of Hindalco Industries have been on sustained downtrend, sliding 21.31% since its close of Rs 182.05 on 22 August 2014. The fall was triggered by the Supreme Court on 25 August 2014 terming the method of allotment of coal blocks since 1993 as illegal.

Hindalco Industries' net profit declined 30.9% to Rs 327.50 crore on 37.5% growth in net sales to Rs 7930.55 crore in Q1 June 2014 over Q1 June 2013.

Hindalco Industries is the world's largest aluminium rolling company and one of the biggest producers of primary aluminium in Asia. Its copper smelter is the world's largest custom smelter at a single location.

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