Hindalco Q2 Results: Profit Misses Estimates, Operating Income Surges 32%
Bound aluminium ingots at a plant. (Photographer: Dhiraj Singh/Bloomberg)

Hindalco Q2 Results: Profit Misses Estimates, Operating Income Surges 32%

Hindalco Industries Ltd. operating profit surpassed expectations on higher volumes and lower costs in the second quarter even as its net profit missed estimates.

Net profit of the billionaire Kumar Mangalam Birla's company fell 60% over a year earlier to Rs 387 crore, according to an exchange filing on Tuesday. The analyst estimates compiled by Bloomberg had pegged the bottom line at Rs 957 crore.

The net profit tumbled because of a loss of Rs 1,398 crore from running and divestiture of discontinued operations during the quarter.

Revenue of the aluminium maker rose 5% year-on-year to Rs 31,327 crore against the estimated Rs 32,002 crore.

Hindalco's earnings before interest, tax, depreciation and amortisation (net of GAAP adjustments) rose 32% year-on-year to Rs 5,171 crore, higher than the estimated Rs 3,534 crore. Business Ebitda increased 24.8% year on year to Rs 4,672 crore. Margin improved to 16.5% from 13.2%.

The company's U.S. subsidiary Novelis Inc. posted a record operating profit at $455 million, surpassing estimates. That was aided by targeted cost control initiatives and favourable metal costs.

Boost To Operating Profit

  • Novelis: All-time high adjusted Ebitda came on the back of higher volumes, good cost control, better product mix and contribution from Aleris.
  • Aluminium: The segment's operating profit jumped 32% year-on-year to Rs 1,066 crore on account of favorable macros and lower input costs
  • Copper: Supply constraint kept treatment and refinement charges lower

Hindalco's consolidated net debt-to-Ebitda ratio stood at 3.52 times on Sept. 30 against 3.83 times on June 30.

Hindalco's shares declined after the earnings, trading 1.98% lower at 2:42 p.m., compared with 1% rise in the benchmark Nifty 50.

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