Worst isn't over; promoters' stake to rise by 5%: Hindalco

'Lower costs, steady margins and high efficiency,' is the mantra Hindalco is following as it readies itself to beat the slowdown blues. Speaking to shareholders at the 54th Annual General meeting, Kumarmangalam Birla, chairman, Aditya Birla Group, agreed that the last one year has been tough for the company and the economy, reports CNBC-TV18's Kritika Saxena.

“Economically, the year 2012-13 was indeed a very trying year. Business environment both in India as well as in major economies across the globe faced several headwinds. Even today the worst does not seem to be over,” he said.
 
Birla added, "Slow growth, lack of investor confidence, steep devaluation of the rupee to an all time low and power outages added to India’s woes. High commodity prices and supply constraints of critical raw material such as coal and natural gas further compounded the problem."
 
However, Birla maintained that despite the tough economic environment, Hindalco had managed to perform better than expected but could have performed even better had the metal prices not been so depressed. What added to the company’s agony was the relatively high energy prices. For the year FY13, Hindalco had posted revenues of Rs 80,193 crore. Through the year the company spent Rs 14,000 crore as capex for expansion.
 
Birla says the big positive for the company was that most of the projects commissioned should start showing benefits soon. Its investments in projects such as Mahan Aluminum Smelter in MP, Aditya Aluminum Smelter In Odisha and Aditya Aluminum Smelter in Odisha are expected to show results.
 
Going forward, the company is working towards creating low cost model to meet challenges.
 
Addressing shareholders queries, Birla also said that the promoters of Hindalco, that hold stake in the company through its 21 entities, will hike stake in Hindalco by 5%. “The promoter holding was only 33% but after the preferential allotment that will get completed at the end of September, the promoter holding will go up quite sharp to 38%, which I believe are much more comfortable levels of promoter holding,” he said.