Hindalco leaves Market Expectations behind

Aluminum giant, Hindalco

Industries' first quarter profit
exceeds
analysts'
expectations, rising nearly
5-fold to 381.2% year-onyear 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 todays 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. Segments 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 companys 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

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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.

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Disclaimer
The investment advice or guidance provided by way of recommendations, reports or other ways
are solely the personal views of the research team. Users are advised to use the data for the
purpose of information and rely on their own judgment while making investment decision.
Dynamic Equities Pvt. Ltd - SEBI Investment Advisory Reg. No.: INA300002022
Disclosure
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DYNAMIC/its Associates/ Research Analyst/ his Relative:

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