Moneycontrol Bureau
Aluminium major Hindalco Industries turned profitable in the quarter ended December 2016, with net income on standalone basis at Rs 320.56 crore against loss of Rs 32.49 crore in year-ago quarter, aided by strong operational performance as well as low base.
Revenue during the quarter grew by 13.8 percent to Rs 9,914.8 crore compared with Rs 8,715.9 crore in same quarter last year, driven by increase in average realisation for both copper and aluminium, along with weaker rupee and higher aluminium volumes.
Aluminium business in Q3 increased 8.6 percent year-on-year to Rs 4,916.9 crore, with its EBIT (earnings before interest and tax) growing 147.4 percent to Rs 875.8 crore driven by higher realisation.
"In addition to Gare Palma IV/4 and Gare Palma IV/5 coal mines, Kathautia mines commenced operations in February 2017 thus further improving coal security," the flagship company of Aditya Birla Group said.
Copper segment revenue jumped 19.3 percent to Rs 5,000.4 crore but its EBIT fell 6.4 percent to Rs 329.5 crore, impacted by lower demand in domestic market and lower by-products realisation (sulphuric acid and diammonium phosphate).
Operating profit shot up 75.5 percent to Rs 1,185 crore and margin expanded by 420 basis points to 11.9 percent compared with year-ago quarter, majorly aided by aluminium business and lower power & fuel cost that dropped 13.2 percent to Rs 1,429.5 crore.Earnings barring topline missed analysts' expectations. Profit was expected at Rs 415 crore on revenue of Rs 9,280 crore and operating profit was estimated at Rs 1,240 crore with margin at 13.36 percent for the quarter, according to average of estimates of analysts polled by CNBC-TV18.
Other income, which also boosted bottomline, increased 20 percent year-on-year to Rs 220 crore while tax expenses for the quarter stood at Rs 139 crore against tax credit of Rs 5.8 crore in corresponding quarter of last fiscal.
At 14:06 hours IST, the stock was quoting at Rs 185.75, up Rs 3.75, or 2.06 percent on the BSE.
Reacting to the result, Tarang Bhanushali of IIFL said that on the operational front the numbers look very good but the bottomline is marginally lower that estimates.
In terms of EBIT margin per tonne for the aluminium business the company has delivered 17.8 percent which is higher than the estimate of 11.7 percent.
Sanjiv Bhasin of IIFL also said that he remains overweight on Hindalco. "It has been one of of our topperforming stocks, and we continue to think it to be a market outperformer," he said.
IIFL has a one year target of Rs 225 per share on Hindalco, he added.
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