Hindalco leaves Market Expectations behind

Aluminum giant, Hindalco Industries' first quarter profit exceeds analysts' expectations, rising nearly 5-fold to 381.2% year-on-year standing at Rs 294 crore. It was on the account of better operational performance in spite of fall in revenue and higher tax cost. Revenue during the quarter missed the estimates, tanking 11.4% to Rs 7,597.3 crore on the yearly basis due to the sharp decline in realizations. Along all the rises, Hindalco share price also went up by almost 2% in today’s trade.

Hindalco adjusted the profit of the last financial year at Rs 61.1 crore against the reported profit of Rs 107.2 crore, owing to the new accounting standards. The market estimated the profit at Rs 218 crore on revenue of Rs 8,650 crore for the quarter. Despite the fall in realizations, the aluminum business grew by 7.5% to Rs 4263 crore on strong volume growth. Aluminum business contributes 56% to the total revenue. Segment’s EBIT climbed 63.9% while the revenue from its copper business fell 27.7% to Rs 3,336 crore on lower production due to planned maintenance shutdown. EBIT also dropped 28.7% to Rs 283.7 crore on Y-o-Y basis.

Meanwhile, Hindalco share price was currently trading at Rs. 146.10 with the rise of almost 3%.

The company’s Operating profit grew by 34.9% to Rs 1,231.7 crore, far ahead of the estimates, and margin expanded by 560 basis points to 16.2% compared with the corresponding quarter of last financial year. Analysts had estimated the Operating profit at Rs 960 crore, and the margin expanded 11.1% for the quarter, respectively.

Hindalco said that Operational performance was also supported by deflationary energy prices. The company also stated that the macroeconomic headwinds are persisting, and the uncertain global macro factors pose several challenges. The cost of Power & fuel declined 9.7% YoY to Rs 1,485 crore, and raw material cost went down by 24% to Rs 3,973.2 crore in the quarter ended June 2016. Other income during the quarter increased 30% to Rs 119.2 crore while finance cost fell 0.7% to Rs 599.57 crore on yearly basis. Tax expenses went up considerably to Rs 118.9 crore from Rs 8.62 crore in the same period.

Hindalco is among top 500 performers for the quarters picked by Dynamic Levels. The stock has strong fundamentals and the company has not incurred losses in past two-quarters. For more details on the stock, pay a visit to the Hindalco share price history and Hindalco share price forecast page of the website.