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Hindalco Industries, the flagship company of Aditya Birla Group, saw record April-June quarter (first quarter, or Q1) profit in 2022-23 (Fy23), aided by the performance of its US subsidiary, Novelis Inc.
The company reported a 47.8 per cent year-on-year (YoY) rise in consolidated net profit to Rs 4,119 crore in Q1FY23, beating Street estimates by a wide margin. Bloomberg consensus estimates had pegged Q1 net profit at Rs 2,852 crore.
The company had posted net profit of Rs 2,787 crore in the year-ago period. On a sequential basis, net profit rose 7 per cent, from Rs 3,851 crore reported in the January-March quarter (fourth quarter, or Q4) of 2021-22 (FY22).
Consolidated revenue rose 40.3 per YoY to Rs 58,018 crore, compared to a revenue of Rs 41,358 crore registered in the corresponding period last year. That compares favourably with Bloomberg consensus estimate of Rs 49,344 crore for Q1. On a sequential basis, revenue rose 4 per cent in the June quarter, from Rs 55,764 crore reported in Q4FY22.
Apart from Novelis, the company’s aluminium downstream (that is, value-added products) and copper businesses also aided earnings growth, supported by operational efficiencies and higher volumes, said analysts tracking the company.
Aluminium and copper prices, while falling over the past few months, were higher compared to last year. This too aided growth, observed sector experts. While global supply-chain problems persist, including lower output in Europe, the company remains cautiously optimistic about the situation improving in the quarters ahead.
“Our product mix enhancement strategy is working well with the aluminium downstream earnings before interest, tax, depreciation, and amortisation (Ebitda) growing fourfold YoY, while Novelis reported its highest-ever Ebitda per tonne, driven by higher product pricing and recycling benefits,” Satish Pai, managing director, Hindalco, said in a media call.
Results showed that Novelis’ Q1 Ebitda came in at $561 million, up 1 per cent over the year-ago period. The US subsidiary reported a 32 per cent YoY increase in sales and $307 million in net income from continuing operations in Q1. It also saw record shipments in North America on strong demand from manufacture of cans and the automotive sector, although a favourable pricing environment was partly offset by inflationary pressures.
The company’s consolidated Ebitda for the quarter came in at Rs 8,640 crore — a jump of 27 per cent over the year-ago period and the highest-ever in any quarter. Bloomberg consensus estimates had pegged Q1 Ebitda at Rs 6,107 crore.
The company’s net debt fell 19 per cent from a year ago to Rs 42,193 crore at the end of June. Hindalco’s revenue from its copper business in the June quarter increased 48 per cent to Rs 10,529 crore versus last year, mainly on account of higher copper prices and volumes.
Shares of Hindalco closed trade 4.41 per cent higher on the BSE to Rs 440.05 apiece on Wednesday, compared to a 0.06 per cent drop in the BSE Sensex. On a market capitalisation basis, its Wednesday’s closing price was Rs 98,886.94 crore.
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