Hindalco Q3: Here's what to expect

Moneycontrol Bureau

Hindalco Industries may post muted growth in December quarter as it is still in the midst of ramping up production at its Hirakkud plant in Orissa, say analysts.

According to a CNBC-TV18 poll, the Aditya Birla Group company is expected to witness 10.1%, quarter-on-quarter jump in sales to Rs 6730 crore on higher metal prices which will be partly offset by a stronger Rupee. Profit too is expected to rise 9.7% to Rs 394 crore on higher realisation on strong aluminium prices on the London Metal Exchange (LME)

Analysts also expect EBITDA (earnings before interest, tax, depreciation and amortisation) to recover from a decline in the first half of FY13 on higher aluminium and copper production with better realisation.

Stock performance
After rallying 23 per cent from mid-November to early January, the stock has again lost steam, shedding almost 13 per cent over the last month. 

Fresh concerns over delay in the commissioning of its alumina refinery in Utkal seem to have dampened investor sentiment. With fresh capacities come on-stream this year, investor sentiments may improve taking the stock up from its current price of Rs 113.95.

The company will announce numbers later in the day.

Bank of America Merill Lynch expects profit to increase 22%, QoQ to Rs 436 crore on higher LME and better volumes. The firm expects costs of the company to reduce marginally, due to improved operations at aluminium units.

B&K Securities expects the company to post 15.3%, QoQ higher profit to Rs 413.9 crore and revenues may escalate around 10% to Rs 6774 crore.

Going ahead
The company’s Renukoot and Hirakud smelters which were shut due to environmental concerns, have resumed operations. This development will help boost capacity.

The firm is in expansion mode with 359 ktpa (kilo tonnes per annum) Mahan Aluminium and Aditya Aluminium smelters and 1.5 million tonne per annum Utkal refinery are likely to be commissioned later this year.

Concerns pertaining to the performance of the company's US-based subsidiary Novelis seem to be easing out on better pricing.

Last month, Hindalco acquired alumina refinery and bauxite mines in Brazil from Novelis as part of corporate re-organisation plan. This will allow the company, with its sole focus on mining and alumina business, to create value out of the moth-balled assets.

Did you read: Hindalco to acquire alumina refinery from Novelis