Improved segment-wise show lifts Hindalco net

Improved segment-wise performance from the aluminium and copper businesses helped Hindalco Industries Ltd. post a 35 per cent increase in its October-December quarter, analysts said. The results were in line with expectations, they said.

Saturday, Hindalco reported a net profit of Rs 264.9 crore, up from Rs 196 crore during the year-ago period. Net income rose to Rs 2,081.3 crore from Rs 1,707.1 crore over the same period a year ago.

A poll of brokerages conducted by Crisil MarketWire had predicted a 36 per cent increase in the company's net profit at Rs 267 crore.

"The aluminium and copper businesses have done well""which have helped the company grow during the December quarter," says Bhavin Cheddha of the broking house, Pioneer Intermediaries.

However, the copper segment is expected to improve its position as the company continues to consolidate production of copper concentrate.

"Hindalco is expected to progressively reduce its dependence on outsourced copper concentrate over the next two years," said Jigar Mistry of Prabhudas Lilladher.

Copper business will also benefit from lower charges for treatment and refining, which will show results in 2005-06.

Hindalco said it expects treatment and refining charges to go down as existing mines increase their production and smaller mines are reopened, encouraged by improved copper prices.

A hike of Rs 2,500 per tonne in aluminium prices undertaken by the company in October also has bearing on the company's financial performance, analysts said.

Hindalco is expected to maintain a double digit growth in the aluminium segment during the entire 2004-05 due to improved prospects seen in electrical, building and transportation segments.