Hindalco Industries Limited (Hindalco), on May 26, reported a 100 percent rise in its consolidated net profit of Rs 3,851 crore for the fourth quarter ended March 2022 as against Rs 1,928 crore recorded a year ago. On a sequential basis, the profit increased 4.8 percent from Rs 3,675 crore earned during the October–December period.
Consolidated revenue for one of the largest metals company in India rose 37.7 percent on-year to Rs 55,764 crore as compared to a revenue of Rs 40,507 crore registered in the year-ago quarter. On a sequential basis, the revenue rose 11 percent from the net revenue of Rs 50,272 crore recorded in the previous quarter.
For the full-year period from April to March 2022, the consolidated net profit grew more than three-fold or 294.2 percent to Rs 13,730 crore from Rs 3,483 crore achieved in FY21.
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Consolidated revenues for FY22 jumped 47.8 percent to Rs 1,95,059 crore from a revenue of Rs 1,31,985 crore for last year.
“With record profitability in the fourth quarter, we had a very good end to the year and we attribute Hindalco’s highest-ever profits not just to strong macros, but also our consistent focus on operational excellence and cost optimization”, said Satish Pai, managing director of the company.
Hindalco continue to remain one of the world’s lowest cost and highest EBITDA margin producers of aluminium. “Our strategy to build a more sustainable business model that is isolated from metal cycles is working very well for us. In line with this, we have allocated over 70 percent of our growth capex to value-enhancing downstream segments and all our growth capex for the next five years will be funded out of internal accruals”, Pai added.
Business Performance
All the business segments of the company witnessed strong growth during the quarter, aided by both the higher global commodity prices as well as higher volumes which more than absorbed the high cost of production.
Novelis
The total shipments of flat rolled products (FRPs) were up at 987 Kilotons (kt) as compared to 983 kt in Q4 FY21. Revenue stood at $4.8 billion (vs $3.6 billion), up 34 percent YoY, driven by higher global aluminium prices. The business reported quarterly adjusted EBITDA (earnings before interest, tax, depreciation and amortization) of $431 million, down 15 percent on year from $505 million. Net income stood at $217 million, up 21 percent YoY, due to lower interest expense in Q4 FY22.
Aluminium
The aluminium production for its India business stood at 326 Kt as compared to 316 Kt in the corresponding quarter. Aluminium sales inched up 2 percent YoY at 336 Kt compared to 329 Kt in the prior year.
Aluminium VAP (excluding wire rods) sales volumes were at 93 Kt, up 1 percent YoY from 92 Kt during the prior year period, driven by recovery of the domestic market. VAP sales, as a percentage of total metal sales, were at 28 percent this quarter, which was the same as the prior year quarter.
The business recorded revenue of Rs 9,847 crore during the reported quarter compared to Rs 5,969 crore in the prior year period.
The India aluminium business registered an all-time high EBITDA of Rs 4,050 crore compared with Rs 1,819 crore during the same period last year, a year on year increase of 123 percent. The growth was primarily due to favourable macros, higher volumes, better operational efficiencies, and improved performance of downstream business offset by higher input costs. The business continue to generate best EBITDA margins in the industry at 41 percent.
Copper
Copper Cathode production during the quarter stood lower at 94 Kt compared to 97 Kt last year while copper rod production fell to 69 Kt compared to 76 Kt during the prior year period. Overall copper metal sales were at 105 Kt were, marginally down from 107 Kt in Q4FY21. Copper Continuous Cast Rod (CCR) sales, however, were up 2 percent YoY, at 74 Kt compared to sales of 73 Kt last year.
Revenue from the copper business for the quarter was higher by 15 percent on year at Rs 9,787 crore this quarter, primarily due to higher global prices of copper and higher volumes. EBITDA jumped 20 percent on year to Rs 387 crore for the quarter compared to Rs 322 crore during last year period, on the back of better operational efficiencies and improved by-product realisations.
Dividend
The company recommended a dividend of 400 percent (Rs 4 per share) for FY22 as against 300 percent (Rs 3 per share) for FY21.
Hindalco ended Rs 11 higher at Rs 407.85 on May 26 at The National Stock Exchange. The stock has generated returns of 7 percent over the past one year and is down 17.4 percent during the past one month.
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