Hindalco Q4 net up 39 pct, beats forecastHindalco Q4 net up 39 pct, beats forecast
Sat Apr 29, 2006 9:04 PM IST
By Thomas Kutty Abraham
MUMBAI (Reuters) - Hindalco Industries Ltd., India's top aluminium and copper producer, reported a 39 percent rise in quarterly net profit on Saturday, well above analysts expectations, helped by record metal prices.
Hindalco said demand for aluminium and copper was likely to remain buoyant in the short term with Asia's third largest economy consuming more metal as it produces more cars and homes for its population of more than 1 billion.
"Hindalco is fully prepared to exploit the growth. We are not waiting for the market to develop, we are driving the market," Debu Bhattacharya, the company's managing director told a news conference.
Hindalco, part of the Aditya Birla conglomerate, expects aluminium and copper demand in India, which grew 23 percent and 10 percent respectively in the year to March 31, to sustain.
"I think this demand can not only be sustained but can be enhanced further," Bhattacharya said.
Hindalco said January-March net profit rose to 6.26 billion rupees from 4.49 billion a year ago.
A Reuters poll of 10 brokerages had forecast Hindalco to report a 9 percent rise in net profit to 4.88 billion rupees.
"It has been an excellent quarter and it has been largely driven by record LME prices," Bhattacharya said.
Hindalco, which has expanded capacity to meet the rising domestic metal demand, has a target to produce 1.1 million tonnes of aluminium a year and 3.6 million tonnes of alumina by 2010.
Its current capacity is 424,000 tonnes of aluminium and 1.14 million tonnes of alumina. Hindalco expects to commission a 35,000 tonne expanded facility at its Hirakud smelter in Orissa by December 2006.
Hindalco's surging net profit was helped by record aluminium, alumina and copper prices in the global market and improved sales volume.
The company's net profit had fallen in the past two quarters due to a disruption at its copper smelters. Its copper division nearly doubled its operating profit to 1.2 billion rupees in three months to March from 646 million rupees a year earlier.
Hindalco said it expects to produce 350,000 tonnes of copper in the year to March 2007 and scale up to 450,000 tonnes in the following year.
In the past quarter, Hindalco produced 18 percent more copper cathodes at 66,748 tonnes, from a year earlier, while its aluminium production stayed flat at 107,064 tonnes.
Company officials said Hindalco had raised aluminium prices by 20,000 rupees per tonne in the January-March quarter in line with London Metal Exchange prices, which hit $2,845 per tonne this week, their highest in nearly 18 years.
Hindalco's sales rose 45 percent to 36.6 billion from a year ago, compared with a Reuters' estimate of 34.13 billion rupees.
Shares in Hindalco, valued at $5.5 billion, rose 27 percent between January and March, outperforming a 20 percent gain for the benchmark stock index.