Hindalco Q1 Results: Profit Rises 45%, Beats Estimates

A casting form on top of an aluminium cylinder. Photographer: Andrey Rudakov/Bloomberg

Hindalco Q1 Results: Profit Rises 45%, Beats Estimates

Hindalco Industries Ltd.’s quarterly profit rose, beating estimates, as finance costs fell.

Net profit of India’s largest aluminium producer rose 45% sequentially to Rs 2,787 crore in the quarter ended June, according to its exchange filing. That compares with the Rs 2,360-crore consensus estimate of analysts tracked by Bloomberg.

That came as its finance costs dropped 9% over the preceding quarter.

Highlights (QoQ)

  • Operating income increased 16% to Rs 6,790 crore. Analysts were expecting Rs 5,687.4 crore.

  • Revenue inched up 2% to Rs 41,358 crore, compared with the projected Rs 41,432.9 crore.

  • Operating margin was at 16.4% vs 14.4%. The consensus estimate was 16.4%.

Operating profit of Hindalco’s aluminum division rose the most.

Key Highlights Of Earnings Conference

  • Net debt rose 9.5% quarter-on-quarter to Rs 51,913 crore owing to higher working capital requirements at copper division. However, it's funded by buyers’ credit at sub-3% interest rate.

  • Net debt-to-Ebitda stands at 2.36x vs 2.59x in the preceding quarter.

  • FY22 standalone capex likely at Rs 2,700 crore at standalone operations.

  • Coal mix in quarter ended June: 69% from linkage, 22% from e-auction and 5% from captive mines. Going ahead, captive sourcing will increase by 5%.

  • Soft domestic market for aluminium and copper in quarter ended June.

  • Will stick to downstream expansion.

  • Company has approved 170 KT of FRP capacity at Hirakud and Aditya entailing investment of Rs 300 billion. Project is expected to be commissioned by FY25, with internal rate of return expected at 15%.

  • Evaluating cleaner source of energy for adding pots in Aditya smelter. Can add additional 50 KTPA by streamlining.

  • Automotive finishing plants at Guthrie, Kentucky, in the U.S. and in Changzhou, China, are ramping up well.

  • Novelis’ expansion of recycling, casting, and rolling facilities at Pinda in Brazil is on track, with commissioning expected in the quarter ended September.

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