Hindalco Q2 results: PAT jumps 78% to Rs 3,909 cr on high aluminium prices

India's Hindalco Industries , one of the country's largest aluminium and copper producers, posted a better-than-expected second-quarter profit on Monday, helped by higher aluminium prices. 

The company, owned by the Aditya Birla Group, said its consolidated net profit jumped 78 per cent to Rs 3,909 crore ($463.3 million) for the three months ended Sept. 30, beating estimates. 

Analysts, on average, had expected a profit of Rs 3,446 crore, according to data compiled by LSEG. 

The demand for metals in the transportation, construction, and packaging industries remained strong this year, with prices of base metals like aluminium and copper rising for the second straight quarter in the July-September period. 

 

The benchmark aluminium and copper prices on the London Metal Exchange rose 20 per cent and 24 per cent, respectively, from the second quarter of last year. 

Hindalco's revenue from operations rose 7.4 per cent to Rs 58,203 crore, while total expenses increased 3.3 per cent to Rs 53,121 crore. 

The company recorded a one-time cost of Rs 514 crore during the quarter due to expenses tied to production disruption at the Switzerland-based plant of its unit Novelis. 

The US IPO-bound aluminium recycler Novelis, which accounts for more than 60 per cent of Hindalco's overall revenue, incurred a net cash impact of $80 million due to the shutdown of its Switzerland plant from flooding in late June. 

Revenue from Novelis rose 5.9 per cent, while the copper segment, the second-largest contributor to Hindalco's revenue, grew nearly 5.4 per cent during the quarter. 

Hindalco sees Chinese imports as an increasing concern, especially if US were to raise tariffs further, said Managing Director Satish Pai. 

"My worry still remains imports from China because the US market is going to get closed for them with the new administration. The only big market left for them, if they have surplus, is going to be India," Pai said. 

Shares of the company closed 0.75 per cent higher ahead of the results. The stock gained 9 per cent in the quarter ended September, against the benchmark Nifty 50's 7.5 per cent rise.

   

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