Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / News/  Hindalco mulls record aluminium production in FY15 to resurrect earnings
BackBack

Hindalco mulls record aluminium production in FY15 to resurrect earnings

Chairman Kumar Mangalam Birla plans to raise production by over 50% to about 1 million tonnes

Chairman Kumar Mangalam Birla plans to raise production by over 50% to about 1 million tonnes in FY15. Photo: AFP Premium
Chairman Kumar Mangalam Birla plans to raise production by over 50% to about 1 million tonnes in FY15. Photo: AFP

Mumbai: Hindalco Industries Ltd, India’s second-largest aluminium producer, is targeting a record output of the lightweight metal this fiscal year to resurrect earnings estimated to have plunged to the lowest in nine years.

Billionaire chairman Kumar Mangalam Birla plans to raise production by more than 50% to about 1 million tonnes in the year ending 31 March, two people familiar with the plans said. “The higher output will mainly come from the Mumbai-based company’s new units in the central state of Madhya Pradesh and the eastern state of Odisha," said the people, who asked not to be identified, pending an announcement.

Alcoa Inc., the largest US aluminium producer, last month forecast demand will exceed production this year, predicting an end to an almost decade-long surplus driven by Chinese output. Aluminium prices averaged at a nine-year low on the London Metal Exchange in the year to 31 March, leading producers including United Co. Rusal, the world’s biggest, and Alcoa Inc. to idle capacity and Rio Tinto Group to take a $1.3 billion writedown on its aluminium business.

Hindalco shares rose as much as 6.5% to 140.90 but pared gains to close 4.80% higher at 138.60 apiece on BSE on Monday. The stock has gained 37% in the past year, compared with a 15% gain in the benchmark S&P BSE Sensex.

Company spokeswoman Pragnya Ram declined to comment ahead of the company’s quarterly earnings.

Profit outlook

Hindalco, excluding its Atlanta-based unit Novelis Inc., may post a profit of 1,530 crore ($255 million) in the 12 months ended 31 March, according to the median of eight analyst estimates compiled by Bloomberg. The earnings, which would be the smallest since the year ended 31 March 2005, were probably eroded after the global prices of the metal crashed and inventory surged.

Worldwide output of the metal has increased at a 5.2% compound annual growth rate since 2001, according to Kenneth Hoffman, global head of metals and mining research for Bloomberg Industries.

Hindalco’s new factories may produce as much as 46% of the company’s total output this year, the people said. The annual 359,000 tonne-smelter at Mahan in Madhya Pradesh was started in the three months ended 30 June, while the Odisha factory with similar capacity was commissioned in January. Bloomberg

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 05 May 2014, 01:52 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie