Hindalco Q1 profit falls 40% to ₹2,454 cr

Consolidated net profit of Aditya Birla Group's flagship company Hindalco Industries dropped 40% year-on-year to ₹2,454 crore for the quarter ended June. The aluminium producer had posted ₹4,119 crore profit in the year-ago quarter.

Revenue from operations declined 9% year-on-year to ₹52,991 crore in the first quarter as against ₹58,018 crore in the corresponding period last fiscal. The company attributed the drop in revenues to unfavourable macros and subdued volumes.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) for the quarter stood at ₹6,109 crore compared with ₹8,640 crore in the same quarter last year.

Hindalco's U.S. subsidiary Novelis reported revenues of $4.1 billion, down 7% quarter-on-quarter, impacted by lower average aluminium prices and subdued shipments.

Total shipments of flat rolled products were at 879 kilo tonnes in Q1 FY24 versus 936 Kt in Q4 FY23, down 6% QoQ due to lower beverage can shipments and unfavourable economic conditions impacting some specialties markets mainly in building and construction, the world's largest producer of rolled aluminium says. This was partially offset by record automotive shipments.

Hindalco's aluminium upstream and downstream businesses witnessed 7% and 11% drop in revenue, respectively, while the company’s copper business reported a 9% growth and highest-ever metal sales, supported by robust market demand.

Aluminium upstream revenue was ₹8,064 crore in Q1 FY24 while EBITDA stood at ₹1,935 crore in Q1 FY24. “Aluminium India Downstream EBITDA for the quarter was ₹147 crore, up 31% sequentially, due to enriched product mix. Aluminium Upstream reported higher quarterly shipments at 341 Kt, up by 5% sequentially, driven mainly by higher demand in electrical and auto segments,” the company says in its earnings release.

“Despite macroeconomic headwinds, Hindalco maintained a strong balance sheet and liquidity position which helped the Company keep the Net Debt to EBITDA ratio below 2x,” the filing says.

“FY24 has started on a promising note. Our focus on expanding our value-added portfolio and operational efficiencies has enabled us to deliver a sustained performance in the face of continued macroeconomic pressures. An enhanced product mix saw the Aluminium India Downstream Business generating higher value, with Q1 EBITDA increasing by 31% QoQ,” says Satish Pai, managing director, Hindalco Industries.

“Despite significant market headwinds, Novelis continued to show sequential improvement in adjusted EBITDA and EBITDA per ton, backed by record sales of automotive aluminium sheets. The Copper Business achieved record metal sales and maintained its market share despite undergoing a planned shutdown. We will continue to strongly position our Company for the future, by maintaining our focus on ESG, controlling costs, securitising resources, and driving downstream expansion,” says Pai.

Shares of Hindalco fell as much as 2.8% after the results and were among the top losers on the Nifty 50 Index.