Hindalco Q4 results: Net profit declines 51% to ₹2,597 cr, misses estimates

The Aditya Birla Group company reported a sharp fall in quarterly profit as charges linked to fire disruptions at Novelis offset gains from higher metal prices

India’s Hindalco Industries posted a surprise fall in profit for the second straight quarter on Friday, missing analyst estimates, as expenses linked to a fire-related disruption at its US unit Novelis offset the benefit of higher base metal prices.

 

The Aditya Birla Group-owned firm reported a 50.8 per cent decline in consolidated net profit to ₹2,597 crore ($271.40 million) for the three months ended March 31, missing analysts’ estimates of ₹4,312 crore, according to data compiled by LSEG.

 

Hindalco, one of India’s largest aluminium and copper producers, benefited from firmer base metal prices and higher demand in the seasonally strong quarter, when construction activities peak and automotive companies push production and sales targets before the financial year-end.

 

 

Benchmark three-month aluminium and copper prices rose 21.8 per cent and 36.7 per cent year-on-year, respectively, during the reporting quarter.

 

Higher commodity prices typically lead to stronger profit margins for mining companies.

 

The firm’s aluminium recycling arm, Novelis, which supplies rolled aluminium to beverage-can makers and automakers, was impacted by fires at its New York plant in September and November last year, causing production interruptions during the reported quarter.

 

The company took a ₹4,171 crore charge during the quarter related to the plant fires in Oswego, New York.

 

Hindalco’s overall revenue from operations rose 20.4 per cent to ₹78,133 crore. Analysts, on average, had expected revenue of ₹72,396 crore.