Hindalco Q1 Profit Surges 25%

14 Aug 2024 , 10:18 AM

Hindalco Industries, promoted by KM Birla, reported a 25.3% increase in consolidated profit after tax (PAT) for Q1FY25, reaching ₹3,074 Crore, driven by favorable macros, operational efficiencies, and lower input costs.

Net sales for the quarter rose by 7.6% to ₹57,013 Crore, reflecting strong performance across the company’s operations.

During a media call, Hindalco executives expressed interest in bidding for Hindustan Copper’s mines in Jharkhand, indicating potential expansion in the copper segment.

The company incurred a one-time exceptional expense of ₹330 Crore due to flood damage at its Novelis plant in Sierre, Switzerland, which halted operations temporarily.

Hindalco recognized an impairment of ₹250 Crore on property, plant, and equipment, along with an ₹80 Crore inventory write-down as a result of the flooding at the Novelis plant.

Consolidated EBITDA for the quarter stood at ₹7,992 Crore, marking a 31% increase year-on-year, demonstrating strong operational performance.

Hindalco’s copper segment reported an all-time high EBITDA of ₹805 Crore, up 52% from the previous year, driven by high domestic sales, healthy by-product credits, and improved operational efficiencies following a successful planned shutdown.

Satish Pai, Managing Director of Hindalco Industries, highlighted that the copper business achieved its highest-ever quarterly EBITDA, with strong demand from the electrical sector expected to sustain growth in India’s aluminum and copper markets.

Pai confirmed Hindalco’s interest in bidding for Hindustan Copper’s Jharkhand mines, noting that the company had previously shown interest when the mines were initially put up for sale.

Hindalco has deferred the Novelis IPO, aiming for premium valuations, due to unfavorable US market conditions. The company plans to revisit the IPO at a more opportune time.

Hindalco is exploring the establishment of a copper foil manufacturing unit as part of its ongoing expansion efforts. Additionally, the company is setting up a gallium extraction unit at its Renukoot facility, with an investment of ₹150 Crore and a timeline of 12-18 months.

Regarding the recent Supreme Court judgment on state levies on minerals, Pai stated that Hindalco does not have any retrospective exposure but will monitor the prospective impact.

On Jharkhand’s recent move to levy a cess on bauxite mining, Pai mentioned that the impact on Hindalco would be limited, affecting only 10-12% of the company’s supply sourced from the state.