Copper piping is seen at Daddario plumbing supply, in Newton, Massachusetts. (Photographer: Michael Fein/Bloomberg)

Hindalco’s Q4 Profit Falls Most In Nine Quarters Missing Analyst Estimates

Hindalco Industries Ltd.’s profit fell the most in nine quarters, missing analyst estimates.

Net profit declined 25 percent on a yearly basis to Rs 377 crore in the three months ended March, according to its exchange filing. That’s much lower than Rs 463.8 crore that analysts tracked by Bloomberg had estimated. The bottom line was hit by weak operational performance and other income coupled with higher depreciation costs. Including the Utkal Alumina Ltd. business, net profit has risen to Rs 616 crore.

Revenue of the country’s largest aluminium producer rose 6 percent from last year to Rs 11,681 crore, roughly in line with the estimated Rs 11,346.7 crore.

Operating income fell 7 percent to Rs 1,257 crore and margins contracted to 10.8 percent, on the back of declining prices of aluminium and copper. Aluminium price declined 11.6 percent in the quarter, while copper prices fell 7.8 percent.

Segmental Break-Up

  • Revenue from the aluminium business fell marginally to Rs 5,512.9 crore.
  • Aluminium and Utkal business Ebitda grew 11.4 percent YoY to Rs 1,265 crore.
  • Revenue from copper business also declined marginally to Rs 6,170.2 crore.
  • Ebitda f the copper business declined 33.8 percent to Rs 329 crore.
  • Other income declined 8 percent to Rs 204.9 crore.

During the financial year 2017-18, the company made an advance payment of Rs 7,966 crore on a long-term project loan. This has led to significant reduction in its interest cost, said Hindalco in its press release accompanying the financial results’ statement.

Hindalco is considering investments in downstream aluminium facilities in order to enrich the company’s product mix. It plans to complete 5 lakh tonnes brownfield capacity expansion at Utkal over the next 30 months at a cost of Rs 1,300 crore, the press release added.

Shares of the Aditya Birla Group company fell as much as 2.4 percent after the earnings were announced.

Also read: Why Morgan Stanley Prefers Vedanta Over Hindalco