India's Hindalco misses first-quarter profit estimates on higher expenses
India's Hindalco on Tuesday reported first-quarter profit below estimates, hurt by a jump in expenses tied to disruptions at its Novelis unit's Switzerland plant.
Consolidated net profit for the Aditya Birla Group-owned company surged 25% to 30.74 billion rupees (about $366 million). Analysts, on average, expected a profit of 36.71 billion rupees, according to LSEG data.
Novelis, which accounts for more than 60% of the firm's overall revenue, incurred a net cash impact of $80 million from the shutdown of its Switzerland-based plant, it said in a statement. Hindalco's total expenses grew over 4% to 522.61 billion rupees.
However, its bottom line still grew on strong sales and higher product prices from Novelis and its second-biggest business, copper.
During the quarter, global prices of base metals including aluminium and copper saw a sharp uptick amid supply shortages and rising demand, analysts said.
For the quarter, benchmark aluminium and copper prices on the London Metal Exchange rose 8% and 8.3%, respectively. [MET/L]
Higher commodity prices tend to raise selling prices and margins for miners.
Peers Vedanta and NALCO also reported higher profit, benefiting from a rise in prices.
Pre-tax profit at the IPO-bound Novelis jumped 21% to 41.7 billion rupees, buoyed by steady demand in its beverage packaging shipments and higher prices, it said in a statement.
Hindalco's revenue from operations grew nearly 8% to 570.13 billion rupees, while its copper business reported a 16% growth in revenue.
($1 = 83.9370 Indian rupees)
