Hindalco Q3 net profit slumps 63% to Rs1,362 cr
09 Feb 2023
Aditya Birla Group flagship Hindalco Industries reported a 63 per cent plunge in after-tax profit to Rs1,362 crore in the October-December quarter of the current financial year (2022-23), due mainly to high cost and lower realisations amidst unfavourable economic conditions.
During the second quarter of the fiscal, too, Hindalco's net profit declined 35.5 per cent to Rs2,205 crore on a drop in aluminium prices in the international market as well as higher input costs.
Hindalco, which operates in 10 countries, reported a 5.7 per cent increase in consolidated revenue from operations to Rs53,151 crore, driven by higher volumes and steady operational performance across India.
The company's quarterly consolidated EBITDA also declined 48 per cent YoY to Rs3,930 crore. The company's overall EBITDA was impacted by rising input costs and unfavourable macros, though it was partially offset by the better operational performance of copper and downstream businesses. These reported YoY growth of 40 per cent (Rs546 crore) and 24 per cent (Rs157 crore), respectively, on better pricing and recovery in domestic demand.
Profit from Novelis, Hindalco’s US unit, and the company’s aluminum upstream segment also fell.
Novelis, the world’s largest producer of rolled aluminum products, on Monday, reported a 95 per cent fall in quarterly profit due to higher costs and inventory destocking in the beverage packing market.
The profit contribution from Novelis, which accounts for almost 42 per cent of Hindalco’s total profit, dropped 25 per cent in the quarter.
Profit more than halved at Hindalco’s aluminum upstream segment, which includes bauxite and coal mining and is the second-biggest profit contributor.
However, despite volatile commodity prices, the company expects current-quarter results to be better due to lower coal costs and improved demand for both aluminum and copper, Satish Pai, managing director, said in a post-results press conference.
“We are quite confident Q4 will be much better than Q3,” Pai said.
Pai also repeated his “big concern” on aluminum imports from China and added that Russian aluminum was also finding its way into Asia.
Aluminium prices on the London Metal Exchange has fallen more than 15 per cent from record highs hit in early 2022, due to factors such as the Russia-Ukraine conflict, recessionary fears and China’s zero-covid policy.