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Hindalco Q2 Results: Profit dips despite record production due to high input costs

Aluminium main ’s September quarter revenue declined as the corporate’s enter prices surged whilst the worth of the silvery-white metallic corrected through the quarter.

The Aditya Birla Group firm reported a consolidated revenue of Rs 2,205 crore, down 35% year-on-year and 46% sequentially. Aluminium costs had reached traditionally excessive ranges through the previous quarter earlier than getting nearer to the long-term common throughout Q2.

The inventory of Hindalco gained 3.53% to shut at Rs 429.75 in a buoyant Mumbai market that ended almost 2% larger. The earnings had been disclosed throughout buying and selling hours.

Consolidated income through the quarter was larger by 18% year-on-year and marginally decrease sequentially at Rs 56,176 crore. Earnings earlier than curiosity, tax, depreciation and amortisation (EBITDA) had been down 29% year-on-year to Rs 5,362 crore. EBITDA margin was at 9.5% in comparison with 15.9% within the year-ago interval.

The primary influence got here from the ability and gasoline prices that nearly doubled year-on-year to only over Rs 5,000 crore.

Novelis, the US-based subsidiary of Hindalco, contributed round two-thirds to the consolidated EBITDA through the quarter, with its efficiency marginally decrease year-on-year. Nonetheless, EBITDA from the Indian aluminium enterprise dropped sharply to Rs 1,347 crore on the again of excessive enter prices.

The corporate stated that demand for aluminium in India through the quarter was strong and it produced the highest-ever volumes. There was “no noticeable slowdown in India,” Satish Pai, managing director, Hindalco, stated in a post-earnings media name.

Nonetheless, a slowdown within the US could possibly be a priority going ahead. However Pai stated that about 60% of Novelis’ enterprise got here from the aluminium cans enterprise, which is “recession-proof.”

In India, coal and vitality contribute about 40% to Hindalco’s prices. The price of the black commodity is more likely to have peaked in India and may soften going ahead, Pai stated.

Hindalco shall be committing capital expenditure to the tune of Rs 2,500 crore in comparison with the steering of Rs 3,000 crore given initially of the yr. Pai stated that this was attributable to an sudden slowdown in getting clearances and gear.

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