The Indian market is “extremely buoyant” with no indications of any slowdown, while the US and China are the two economies that need to be watched, according to a top official of Hindalco Industries.
The prices of coal in India, which peaked during the second quarter ended September, are expected to fall during the coming quarters, the official added.
“So far we are not seeing any slowdown in the Indian economy and it is extremely buoyant and is emerging strongly after the pandemic. The country is in a strong position with a strong demand being witnessed from sectors such as auto and infrastructure, but the US and China—the two largest economies—should be watched for any signs of a slowdown,” Hindalco Industries managing director Satish Pai said during a media interaction.
“There is sustained demand from the country,” he said, adding that the consumption of aluminium is up by 25%.
Hindalco, an Aditya Birla Group metals flagship company, posted a consolidated net profit of `2,205 crore, a 35% fall from `3,417 recorded in the same period a year ago. The net profit was impacted primarily by elevated input costs and inflationary impacts.
During the quarter, consolidated revenue rose 18% to `56,176 crore, driven by higher volumes and better realisations, compared with `47,665 crore logged during the year-ago quarter.
Coal prices, which peaked during the quarter, also had its impact. Hindalco’s coal linkages were down to about 50% from the normal 60-70%, which prompted it to buy more coal from the open market.
“While the availability of coal is still tight, we expect the situation to improve in the coming months. The prices of coal are also expected to fall by third and fourth quarters,” Pai said.
Hindalco’s quarterly consolidated Ebitda fell 29% to `5,743 crore (`8,045 crore in the year-ago period), impacted by rising input costs and unfavourable macros, partially offset by better operational performance of the copper and downstream businesses.
“While the upstream aluminium business Ebitda was impacted due to elevated raw material and energy costs, our aluminium downstream business performed well with Ebitda more than doubling year-on-year due to better pricing and market demand. The copper business outperformed, reporting its highest-ever metal and copper rod sales,” he added.
Novelis, the US subsidiary of Hindalco, said its revenue rose 17% to $4.8 billion in Q2 (from $4.1 billion), supported by higher volumes, increased product pricing, a favourable mix and higher average aluminium prices. Its total shipments of flat-rolled products were up 2% at 984 Kt in Q2, driven by recovery in automotive and aerospace shipments.