Hindalco Industries lost 1.71% to Rs 92.15 at 14:27 IST on BSE after net profit rose 11.52% to Rs 474 crore on 3.15% decline in revenue from operations to Rs 5838 crore in Q1 June 2013 over Q1 June 2012.
The Q1 result was announced during trading hours today, 13 August 2013.
Meanwhile, the S&P BSE Sensex was up 239.01 points or 1.26% at 19,185.99.
The stock fell on high volumes. On BSE, 23.48 lakh shares were traded in the counter as against average daily volume of 9.95 lakh shares in the past one quarter.
The stock was volatile. The stock lost as much as 4.21% at the day's low of Rs 89.80 so far during the day, triggered by the company's US subsidiary Novelis Inc. reporting weak Q1 result on Monday, 12 August 2013. The stock rose as much 0.21% at the day's high of Rs 93.95 so far during the day, after the company reported Q1 earnings. The stock had hit a 52-week low of Rs 83.05 on 7 August 2013. The stock had hit a 52-week high of Rs 137 on 2 January 2013.
The stock underperformed the market over the past one month till 12 August 2013, sliding 7.77% compared with the Sensex's 5.07% fall. The scrip had also underperformed the market in past one quarter, declining 11.72% as against Sensex's 5.84% fall.
The large-cap company has equity capital of Rs 191.45 crore. Face value per share is Re 1.
Hindalco Industries' earnings before interest, taxation, depreciation and amortization (EBITDA) rose 3.45% to Rs 479 crore in Q1 June 2013 over Q1 June 2012.
Other income for Q1 June 2013 includes non-recurring income of Rs 203 crore, sharply higher than Rs 130 crore in Q1 June 2012.
Hindalco said that the performance in Q1 June 2013 was achieved despite adverse macro-economic headwinds. The average aluminium prices on LME dropped by around 7% on year on year basis in Q1 June 2013. This sharp fall in prices was partially cushioned by the depreciating rupee, Hindalco said. As in the corresponding quarter of last year, the copper business carried out a planned shutdown in one its smelters that resulted in a lower than normal level of production, Hindalco said.
Hindalco Industries said that lower metal prices led to a 3% drop in sales revenue in Q1 June 2013.
Finance costs during the quarter were higher on account of higher average borrowing compared to Q1 June 2012. Finance costs surged 83.95% to Rs 149 crore in Q1 June 2013 over Q1 June 2012.
Hindalco Industries said that there has been a significant progress on all projects being implemented by the company and its subsidiary Utkal Alumina International (UAIL). The company also said that in view of the delays in getting various regulatory approvals and the current uncertain economic environment, the company is re-evaluating its investment strategy with respect to its proposed Aditya Refinery and Jharkhand Aluminium Projects.
On future business outlook, the company said that its focus is now on ramping up the new projects already on stream. Depressed LME prices in an otherwise inflationary scenario pose a significant challenge, Hindalo said. However, the company is confident of riding through these challenges with its trust on stabilizing the projects, operational efficiencies and cost control, Hindalco Industries said.
Earlier, Hindalco Industries' US subsidiary Novelis Inc. reported weak Q1 result on Monday, 12 August 2013. Novelis' net profit fell 84.61% to $14 million on 5.56% decline in net sales to $2.408 billion in Q1 June 2013 over Q1 June 2012. Excluding certain tax-effected items, net profit for Q1 June 2013 was $21 million. Novelis is a subsidiary of Hindalco Industries.
Adjusted EBITDA declined 21.23% to $204 million in Q1 June 2013 over Q1 June 2012. Novelis said that latest quarter's results included a non-recurring $14 million amendment to the company's employee Long-Term Incentive Plan. In addition, the company faced continued pricing headwinds and softer than expected demand for beverage can sheet partially driven by unfavorable weather conditions.
Novelis said the decline in sales was primarily due to a 7% decline in average aluminum prices, lower shipments, and lower conversion premiums. "Despite the challenges we faced in the first quarter, we maintained financial discipline through good cost control and will continue this focus on cost containment going forward. In addition, our global strategic expansions and favorable demand trends supported by the 2014 World Cup in Brazil and automotive material substitution towards aluminum sheet will also help drive our business forward in the second half of this fiscal year", said Phil Martens, President and Chief Executive Officer for Novelis.
Hindalco Industries is the world's largest aluminium rolling company and one of the biggest producers of primary aluminium in Asia. Its copper smelter is the world's largest custom smelter at a single location.
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