Home / Companies / Company Results /  Hindalco doubles Q4 net as India biz shines
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Aditya Birla group company Hindalco Industries Ltd on Thursday said its consolidated March quarter net profit nearly doubled to a record 3,851 crore from the previous year’s 1,945 crore, backed by a strong performance in its India aluminium business.

Consolidated revenue grew 37.7% during the period, while consolidated Ebitda (earnings before interest, tax, depreciation and amortization) rose 30% to 7,597 crore.

The Indian aluminium business posted a robust Ebitda growth of 123% to 4,050 crore, with Ebitda margins of 41%. The company attributed the same to favourable macros, higher volumes, better operational efficiencies, and improved performance of downstream business offset by higher input costs.

Aluminium prices on the London Metal Exchange (LME) during the quarter had averaged about $3,273 a tonne, up 56.2% year-on-year and 18.4% sequentially, as per analyst data. The same is likely to have lifted profitability of Hindalco’s aluminium segment, despite higher coal costs.

The company’s India business recorded aluminium production of 326,000 tonnes versus 316,000 a year earlier. Aluminium metal sales at 336,000 tonnes during the quarter came in higher than the 329,000 tonnes in the previous year.

Hindalco’s copper business did well, too, with the segment revenue rising 15% from a year ago to 9,787 crore, primarily due to higher global prices of copper and higher volumes. Better operational efficiencies and improved by-product realizations meant that Ebitda for the segment at 387 crore was up 20% year-on-year in Q4.

However, its US subsidiary Novelis reported a relatively softer performance during the quarter, marred by one-offs. It was also impacted by the semiconductor chip shortage in auto industry, cost inflation and other short-term operational issues, as well as a non-recurring regulatory provision taken in the quarter. The adjusted Ebitda of $431 million was 15% below the previous year’s $505 million. Higher operational costs of about $55 million on account of production and logistics challenges and $15 million in non-recurring regulatory provisions impacted Ebitda, as per analysts.

However, Novelis remains central to Hindalco, contributing around 62% to its operating profits. Despite the challenges facing the automotive sector due to chip shortage, strong can demand, rising aerospace order book and favourable housing fundamentals in US and Europe, should help Novelis, said analysts. Motilal Oswal Financial Services maintained forward estimates for Novelis.

“With record profitability in the fourth quarter, we had a very good end to the year. We attribute Hindalco’s highest-ever profits not just to strong macros, but our consistent focus on operational excellence and cost optimization. We continue to remain one of the world’s lowest-cost and highest Ebitda margin producers of aluminium," Satish Pai, managing director, Hindalco, said. The Hindalco Ltd stock closed at 407.75 with gains of 2.75% on the BSE on Thursday. The results were declared after market hours.

Moving forward, with softening aluminium prices, Hindalco may face some challenges in the India business in the first quarter as coal costs are rising, it said.

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