Hindalco consolidated Q3 PAT jumps 77% to Rs1,877 cr

The higher net profit was mainly driven by strong performance by Novelis and domestic aluminium business.

Hindalco reported a 76.2 per cent year-on-year jump in its standalone net profit for fiscal third quarter (October-December 2020-21) to Rs340 crore against Rs193 crore in the corresponding quarter of the previous financial year.

Standalone revenue in Q3 FY21 stood at Rs11,351 crore, up 11 per cent YoY from Rs10,230 crore.

Standalone EBITDA rose 16.7 per cent to Rs1,182 crore against Rs1,013 crore YoY. The standalone EBITDA margin grew to 10.4 per cent against 9.9 per cent YoY.

Copper sales for the quarter stood at 73 kt, lower than the sales of Q3 FY20 which were at 84 kt, due to a planned maintenance shutdown in one of the smelters.

Aluminium sales stood at 315 kt against 328 kt in the year-ago.

Consolidated revenue from operations for the quarter was up 19.73 per cent at Rs34,958 crore compared to Rs29,197 crore in the corresponding quarter of FY20, Hindalco stated in a BSE filing.

Revenue was driven by higher volumes and better product mix, lower input costs, stability in operations and cost saving actions, Hindalco Industries managing director Satish Pai told reporters in a virtual press meet.

"The demand has been back globally during the third quarter to the pre-Covid levels in every sector. Novelis achieved record shipments, driven by strong demand across product end markets. The India business delivered an excellent performance with aluminium value-added products continuing to record higher volumes," Pai added.

Going forward, he said the company is quite bullish on the demand for the next financial year.

Now that the vaccination drive against the corona virus in on, the company expects demand situation to improve further in the final quarter of FY21, Pai said "Q4 demand a million tonnes of aluminium is more or less where the capacity demand is currently. So, in Q4 the demand will be at the Q3 levels."

While aluminium prices are market-dependent, Pai said on the London Metal Exchange (LME) it is currently trading at $2,000 per tonne level and is expected to remain in the $1,900-2,000/tonne level during the fourth quarter.

Further, he said, the inclusion of the Aleris business has positively impacted the overall top line and EBITDA, with realisation of synergies at $54 million on a run-rate basis in the third quarter.

Meanwhile, the company is planning to come out with a capital allocation plan soon, Pai said without elaborating.

"We believe that cash flow generation is going to be good. So we are going to sort of describe how we will invest that money into a growth capex to reduce our net debt, as well as distribution to shareholders. So this capital allocation strategy will be laid out in the coming weeks," he said.

The standalone net debt of Hindalco stood at Rs14,800 crore and that for Novalis at Rs47,500 crore.