Hindalco tumbles after clarification

Hindalco Industries fell 4.32% to Rs 149.55 on BSE after the company clarified on the Supreme Court cancelling coal block allocation.

Meanwhile, the BSE Sensex was down 276.33 points, or 1.03%, to 26,468.36.

On BSE, 23.44 lakh shares were traded in the counter, compared with an average 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 139.60 during the day. The stock hit a 52-week high of Rs 198.70 on 25 July 2014. The stock 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 had also underperformed the market in past one quarter, falling 6.29% as against Sensex's 5.42% rise.

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

In a landmark decision, the Supreme Court on Wednesday, 24 September 20014, scrapped 214 of the 218 coal blocks allocated between 1993 and 2010. The cancellation, however, will take effect after six months. The companies running these blocks have to compensate the government by paying Rs 295 per metric tonne.

Hindalco Industries clarified during trading hours today, 25 September 2014, that it had been allocated four coal blocks -- Mahan coal block jointly with Essar Power; Tubed coal block jointly with Tata Power; Talabira II & III coal blocks jointly with Mahanadi Coal Fields & Neyveli Lignite Corporation; and Talabira I coal block.

Mahan, Tubed and Talabira II & III Coal blocks are not yet in operation while Talabira I coal block feeds coal to the power plant which supplies power to the company's Hirakud smelter, the company said.

At a suggested levy of Rs 295 per tonne on coal, the total one time impact on the company would be around Rs 500 crore, the company added.

The company said it was not expecting the captive coal immediately, hence it plans to operate on purchased coal.

The only incremental impact because of the cancelation of coal blocks would be on the cost of production at Hirakud smelter starting April 2015, which is not expected to be significant, the company said.

Meanwhile, a media report suggested that Hindalco might sell land in Mumbai. Referring to the media report, Hindalco clarified during trading hours today, 25 September 2014, that it constantly evaluates various value optimization options with respect to the non-productive assets of the company including the land located at Kalwa, Thane.

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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