Hindalco Industries, one of the country's largest aluminium and copper producers, reported a 40 per cent fall in first-quarter profit on Tuesday as softer volumes and weak metal prices weighed.

The company's consolidated net profit fell to 24.54 billion rupees ($296.4 million) in the quarter ended June 30 from 41.19 billion rupees a year earlier.

With consumers largely cutting discretionary spending amid elevated global inflation, canned beverage shipments were curbed leading to soft aluminium sales during April-June.

Net sales in Hindalco's U.S. unit Novelis, which accounts for over 63 per cent of the company's total revenue, fell about 20 per cent to $4.1 billion in the quarter, it said last week.

Novelis, the world's largest producer of rolled aluminium, reported a 25 per cent year-on-year fall in core profit. The company said the drop was "primarily driven by lower shipments, cost inflation, and less favorable metal benefit from recycling."

Additionally, a drop in prices of metals such as copper and aluminium during the quarter also hurt the profits of non-ferrous metal companies like Vedanta and Vedanta Group-owned Hindustan Zinc.

Hindalco's aluminium upstream and downstream businesses experienced seven per cent and 11 per cent declines in revenue, respectively, while its copper segment reported a nine per cent growth.

Shares of Hindalco, the flagship metals producer of the Aditya Birla Group, fell as much as 2.8 per cent after the results and were among the top losers on the benchmark Nifty 50 index. ($1 = 82.7950 Indian rupees).

Related Topics
comment COMMENT NOW