The Hindu Business Line : Hindalco net profit up 35%, sales 23% in Q3

HINDALCO Industries Ltd has reported a 35.1-per cent growth in profit after tax at Rs 264.9 crore for the quarter ended December 31, 2004, against the previous corresponding Rs 196 crore.

Net sales were up 23 per cent at Rs 2,044.9 crore (Rs 1,662.8 crore for the year-ago period).

"This has been a very good quarter despite a number of reverses. It is a pleasing story," Mr Debu Bhattacharya, Managing Director, Hindalco, told a press briefing.

According to an official statement, the company's aluminium business accounted for 44 per cent of net sales and 81 per cent of EBIT (earnings before interest and tax), the balance coming from the copper business. Higher volumes, improved realisations, shift in market mix in favour of higher domestic sales and continued thrust on value-added products were the growth enablers in the aluminium business.

In copper, despite higher international prices and modest volume growth, EBITDA (earnings before interest, taxes, depreciation and amortisation) margins fell from 11 per cent to 9.2 per cent as realisations fell due to steep duty reduction by 10 per cent, removal of export incentives and higher input costs. There is apprehension that duties may dip further in the upcoming Union Budget though TCRC rates should pick up.

On business outlook, the statement said, "The aluminium sector continues to perform well with worldwide consumption growth at 8.6 per cent in 2004. The Indian aluminium market has grown by over 10 per cent in the first nine months of the financial year and prospects in the electrical, building and transportation sectors look good, indicating a second double digit growth year in a row for aluminium.

"The worldwide consumption of copper grew at around 6.9 per cent in 2004 on the back of economic growth in the US and strong Chinese demand. Domestic consumption increased by 10 per cent as demand continued to be buoyant from user segments such as winding wire, power cables and transformer industry. An increased export of downstream products supported higher deemed export sales.

"However, non-value added imports from Sri Lanka under FTA continue to adversely impact the domestic sales of Indian producers. The premium on cathode has hardened and sustained period of buoyant copper prices is being forecast.

For the nine-month period, Hindalco reported a 15.2-per cent increase in net profit at Rs 710.5 crore (Rs 616.7 crore) on net sales of Rs 5,766.1 crore (Rs 4,303.5 crore).

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