Net profit for the fiscal has increased to Rs 566.7 crore from Rs 496.2 crore in 1997-98, while turnover has risen to Rs 1,766.99 crore from Rs 1,473.2 crore in the previous year.

The growth in sales has been driven primary by volumes which jumped 17 per cent and 3 per cent due to higher realisations, despite decline in prices, through sale of more value-added products.

Gross profit increased almost 27 per cent to 838.38 crore, while operating margin was up 2.9 per cent to 44 per cent.

Interest burden was marginally 15.6 per cent higher at 83.83 crore. Depreciation has increased 60.5 per cent to Rs 124.5 crore. Provision for taxation has jumped 69 per cent to Rs 147 crore from Rs 87 crore in theprevious fiscal.

The company has initiated a feasibility study on a brownfield expansion at its integrated complex at Renukoot, Uttar Pradesh. Chairman Kumar Mangalam Birla said: "The brownfield expansion is not a substitute for the greenfield project in Orissa. We will be in a better position to talk about it in a few more months."

The brownfield project entails induction of new smelting technology, augmentation of alumina refining and power generation capacity through technological upgradation at a comparative lower cost as against a greenfield project.

Asked whether the Aditya Aluminium project will be a division of Hindalco, Birla said: "We are examining all options. A final decision on the project will be taken by July-end."

The Financial Express had reported yesterday that the company was exploring the option of hiving off a part of the project to a separate company to reduce the financial burden on Hindalco.

Hindalco president Askaran Agarwala said: "We cannot divulge strategic details of theOrissa project till we study the final techno-economic feasibility report in detail."

Asked on whether Hindalco is interested in the strategic sale of Balco, Birla said: "Our project team is looking at it, but it is still too premature."

Agarwal, commenting on Hindalco's prospects for the current fiscal, said that international prices were looking up and have risen over $200 per tonne in the last two months.

"One cannot be sure, but if the current trend continues, we can raise prices which will have a positive effect on the bottomline," he added.

The Hindalco board, at its meeting on Thursday, have recommended a dividend of Rs 6.50 a share.

INSIGHT:

Despite soft aluminium prices, Hindalco has managed to post an impressive 19.93 per cent improvement in turnover at Rs 1766.99 crore for the year ended March 1999. Thanks largely to improved volumes and a clever mix of downstream value-added products. In fact the higher realisations from the value added products have helped the company boostoperating profit margins, which were buoyant at 44 per cent compared to 41.11 per cent last year. Obviously backward integration into captive power generation at Renusagar and having one of the lowest cost production bases in the world has also helped Hindalco. All of this has translated into a bottomline growth of 14.22 per cent for the company. For the interim, Hindalco should definitely be able to maintain its margins due to its range of value added products. A further firming up of aluminium prices should also give the company the leverage required to hike prices even higher.