Lower finance cost boosts Hindalco, net more than doubles
(Eds: Adding more details with management commentary)
Mumbai, Aug 10 (PTI) Aditya Birla Group flagship
Hindalco, which today reported an over 100 per cent spike in
June quarter net at Rs 734 crore boosted by lower finance cost
and stable operations, is planning an Rs 3,500-crore capex
over the next tw0 years, a top company official said.
Rising metal prices has boosted its domestic revenue
to Rs 10,670 crore for the quarter under review, despite an
increase in the input costs, mainly of coal and furnace oil.
The city-based company has drawn up a capital
expenditure plan of Rs 3,500 crore over the next two years, of
which Rs 1,500 crore will be spend this fiscal year towards
doubling its downstream capacity.
"Our net profit has jumped 102 per cent at Rs 734
crore in the June quarter compared to Rs 364 crore in Q1 of
FY18. The numbers were driven by lower finance cost, stable
operations and higher by-products realisation in the copper
business," managing director Satish Pai told reporters here
Encouraging show was despite increase in the input
costs, mainly of coal and furnace oil, he said, adding
interest expense was lower by 23 per cent at Rs 464 crore,
mainly on account of re-pricing of long term project loans and
re-payments made last year.
"We have drawn up a capital expenditure plan of Rs
3,500 crore over the next two years. Rs 1,500 crore will be
spend this fiscal to double our downstream capacity," Pai
said, adding the new copper continuous cast rod plant ramp up
is on schedule.
Besides, Utkal Alumina's brownfield capacity expansion
of 500 kilo tonne is also on schedule and is expected to be
completed by FY21, he added.
Pai pointed out that the Hindalco hopes to generate Rs
3,000 crore cash in FY19 and will repay Rs 1,500 crore of
loans in the September quarter. The company's gross debt stood
at Rs 23,311 crore and net debt at Rs 17,297 crore in June.
Pai said domestic aluminium demand is growing at 10
per cent per annum, and he sees the demand coming in from the
construction sector mainly low cost housing projects, auto,
packaging and electrical sectors.
Commenting on pricing, he said, aluminium prices are
ruling high and may remain high due to the trade wars between
the US and China, which is worrisome. However, the industry
may not see global recession due to the trade war, he added.
On USD2.58 billion acquisition of Aleris Corp by
Novelis, Pai said, the deal is expected to be completed by
The Hindalco counter closed 2.2 per cent down at Rs
222.40 on the BSE against a 0.41 per cent correction in the
benchmark Sensex.(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)