Challenging market to affect Hindalco's performance: Birla

The challenging conditions in the commodities market, particularly the aluminium sector, will impact Hindalco's performance in the short term, the company's Chairman Kumar Mangalam Birla said today. Birla, also the Chairman of the Aditya Birla Group, said improved aluminium fundamentals and large-scale smelting curtailment by global majors have supported the recovery in aluminium price, a company statement said. "The commodity markets, in particular the aluminium industry, are going through a challenging phase at present because of the sharp slide in realisations.

This would impact Hindalco's performance in the near term," the statement quoted Birla as saying at Hindalco's AGM today. He, however, said the firm is all set to capitalise on the growth opportunities such as growing urbanisation, light weight of vehicles and growth in emerging markets. "2015-16 onwards, following the full ramp-up of projects, Hindalco's financial performance will be significantly impacted as interest and depreciation flow through the P&L (profit and loss) statement," he said.

It is in this context that the short-term outlook for domestic aluminium business would be challenging. In coming years, the focus will continue to be on operational excellence and increasing the productivity of new assets, Birla added. "The company has a strong business portfolio comprising de-risked copper business, coupled with the technologically intensive portfolio of Novelis.

Along with this, its focused approach would go a long way in ensuring a robust future," he assured the company's shareholders. On the global commodities market, Birla said the improved aluminium fundamentals, large-scale smelting curtailment by global majors have supported the price recovery. Consequently, the global primary aluminium industry moved back to a deficit position for the first time in 7 years.