Hindalco Q2 Results: Profit dips 35% YoY to Rs 2,205 crore despite sales growth

The topline was driven by higher volumes and better realisations, the global metals producer said in a release. The company maintained strong operational performance across all businesses. Copper business and aluminium downstream business reported year-on-year growth in operating profit of 55% and 163% respectively, driven by better pricing and recovery in domestic demand.

Hindalco’s standalone net profit slumped 66% YoY to Rs 548 crore, while revenue rose a mere 6.3% to Rs 18,382 crore. However, consolidated operating profit declined 29% YoY to Rs 5,743 crore due to higher input costs and inflationary impacts.

“While the upstream aluminium business EBITDA was impacted due to elevated raw material and energy costs, our aluminium downstream business performed well, with EBITDA more than doubling YoY due to better pricing and market demand,” Satish Pai, MD of Hindalco, was quoted as saying in the release.

Novelis reported strong earnings for the quarter, with higher shipments driven by a recovery in automotive and aerospace segments and better pricing. The company maintained a strong balance sheet and robust cash flows, with consolidated net debt to EBITDA ratio below 2 times.

NOVELIS

Total shipments of flat rolled products rose 2% YoY to 984,000 tonnes in Q2, driven by the recovery in automotive and aerospace shipments.

Revenue increased 17% YoY to $4.8 billion, supported by higher volumes, increased product pricing, a favourable mix and higher average aluminium prices. The beverage can maker’s operating profit fell 8% YoY as higher prices and volumes were offset by inflationary pressures, other operating costs and unfavourable foreign exchange fluctuations.

ALUMINIUM

Upstream revenue rose 11% YoY to Rs 8,215 crore, supported by better realisations. However, the upstream business operating profit plunged 57% YoY to Rs 1,347 crore due to higher input costs and unfavourable macros. The downstream business saw revenue growth of 13% to Rs 2,884 crore.

The operating profit of this business was at a record Rs 200 crore, primarily due to better pricing of downstream products. Operating profit per ton for the downstream business stood at $264 in Q2, against $120 in the year-ago period.

COPPER

Revenue from the copper business grew 1% YoY to Rs 9,658 crore on account of higher volumes. Operating profit for the business grew by 55% YoY to Rs 544 crore on the back of higher domestic sales and improved by-product realizations.

Overall copper metal sales were at a record 112,000 tonne, up 1% YoY.