Hindalco Q1 Profit Misses Estimate On One-Time Provision
Hindalco’s profit remains flat, even as the company’s revenue expanded.
India’s largest aluminium producer Hindalco Ltd.’s net profit fell, missing analyst expectations, as the company made a one-time provision related to a Supreme Court order on illegal mining in Odisha.
Net profit declined 1.5 percent over last year to Rs 289.5 crore, according to a stock exchange filing. Analysts tracked by Bloomberg had pegged the profit at Rs 389 crore.
The Aditya Birla Group company made a one-time provision of Rs 104 crore “out of abundant caution” after the Supreme Court directed that a 100 percent penalty be levied on companies, which have illegally extracted iron and manganese ore in Odisha since 2000. Hindalco was not a related party in the top court's judgement but anticipates that it may have an impact on one of its ongoing legal matter, the company said.
Revenue grew 28.8 percent from last year to Rs 9,770 crore. Operating income rose 2.03 percent to Rs 1,148 crore, while margin narrowed 208 basis points to 11.74 percent as raw material costs increased for the company.
- Raw material costs rose 46 percent to Rs 5,827 crore.
- Revenue from its aluminium business rose 9 percent to Rs 5,008, driven by higher sales and realisation.
- Aluminium production was 4 percent higher than last year, and alumina production grew 2 percent.
- Higher volume and realisation pushed up revenue of copper segment by 51 percent to Rs 5,403 crore.
Shares of Hindalco fell as much as 7.9 percent, the most in nine months, extending the decline after its earnings were announced. That compares with a 1 percent fall in the benchmark S&P BSE Sensex at 2:50 p.m.