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Hindalco will return to pre-Covid levels by H2: Kumar Mangalam Birla

All of the company's aluminium upstream plants continue to operate at near full capacity with all logistics infra coming back on track

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Hindalco Industries | Indian Economy | Novelis

Aditi Divekar  |  Mumbai 

Kumar Mangalam Birla
Kumar Mangalam Birla

Hindalco Industries’ performance would return to pre-Covid levels in the second half of the current financial year (FY21), its Chairman Kumar Mangalam Birla told shareholders on Thursday. He said the firm was prioritising the health and safety of its workforce amid the outbreak.

Speaking at the company’s 61st annual general meeting held virtually, Birla said: “The delivered subdued performance last year with FY20 GDP (gross domestic product) growth falling to 4.2 per cent. We witnessed contraction in the first quarter (Q1) on account of widespread shutdowns. Despite this slump in Q1, activity levels are gradually normalising and I remain confident that India’s long-term growth potential remains intact despite the setback.”

All of the company’s aluminium upstream plants continue to operate at near full capacity with all logistics infrastructure coming back on track, Birla said. All downstream plants are operating at partial capacity to meet market conditions. Export demand remains stable and continues to offset subdued domestic conditions. The copper facilities are also ramping up to their optimal levels. All plants of Novelis, Hindalco’s subsidiary, are operational and many are now running at their full capacity. Automotive customers in North America and China are now pulling at nearly pre-Covid levels, Birla said.

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Meanwhile, the company aims to lower its fixed costs by 15 per cent in FY21 and has chalked out a capex for Hindalco’s domestic operations at Rs 1,500 crore and $450-500 million for

Hindalco would continue to reduce exposure to London Metal Exchange’s (LME’s) price fluctuations by increasing share of downstream value-added products across businesses, said Birla. “In FY20, we have succeeded in delinking 80 per cent of Hindalco’s consolidated Ebitda (earnings before interest, taxes, depreciation and amortisation) from the LME,” he added.

However, low-cost imports continue to hurt the domestic aluminium and copper industry, he said. To counter this, Hindalco is maintaining a relentless focus on better efficiencies and cost competitiveness. “All our smelters continue to be in the first quartile of the global cost curve. Cash conservation and maintaining adequate liquidity will help us deliver sustained performance despite the current tough environment due to Covid-19,” he said.

The company reported a consolidated Ebitda of Rs 15,536 crore on a turnover of Rs 1,18,144 crore in FY20.

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First Published: Thu, September 10 2020. 18:14 IST
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