Hindalco posts near-flat net profit in Q2 at Rs 2,196 cr on lower prices, demand

Hindalco Industries Ltd, one of India's largest aluminium and copper producers, on Friday reported near-flat consolidated net profit at Rs 2,196 crore for the quarter ended September 30, 2023 due to lacklustre aluminium prices and demand.

The Aditya Birla Group-owned company, which operates in 10 countries, reported consolidated net profit of Rs 2,205 crore in the year-ago period.

Average aluminium and zinc prices slumped in the reported quarter, with the London Metal Exchange's aluminium rates dropping 5.1% sequentially and alumina sliding 4.1%, analysts said.

Factory activity in September expanded in India - the world's second-biggest aluminium producer - at the slowest pace in five months, a private survey showed.

Novelis, Hindalco's US unit and the world's largest aluminium recycler with production and recycling operations across Europe, recorded an 11.4% plunge in revenue, pulling down total sales nearly 4% to Rs 54,169 crore.

Hindalco said in a statement that revenue from its copper business, the company's second-largest segment, rose around 30% to Rs 12,441 crore due to higher metal shipments.

Shares of Hindalco, which houses global brands such as Eternia Windows, Maxloader and Everlast Roofings, traded flat after the results. The stock gained 17% during the quarter, outpacing a 2.3% rise in the benchmark Nifty 50 Index.

Hindalco’s India business pre-pays long-term debt of Rs 2,120 crore in August 2023, said the firm in an earnings statement. Consolidated net debt to EBITDA was at 1.66x at the end of September 30, 2023 as against 1.73x as of June 30, 2023.

Commenting on the results, Satish Pai, Managing Director, Hindalco Industries: “Copper business delivered its best-ever quarterly results backed by record metal sales. Aluminium India upstream EBITDA rose by 7% over the first quarter supported by higher volumes and lower input costs. Aluminium India downstream business EBITDA increased 16% sequentially due to higher volumes. Novelis continued to show sequential improvement in EBITDA and EBITDA per ton, driven by higher volumes, particularly in can shipments which grew 12% over the last quarter."

With inputs from Reuters