By Swansy Afonso
Indian billionaire Kumar Mangalam Birla’s Hindalco Industries Ltd. reported a jump in quarterly profit aided by a rising appetite for aluminum and copper in the world’s fastest growing major economy and better prices.
Net income was 4.14 billion rupees ($60 million) in the three months to June from 2.89 billion rupees a year earlier, the Mumbai-based company said Friday. Earnings fell short of analyst estimates of 4.4 billion rupees. Including its Utkal Alumina unit, Hindalco’s profit more than doubled to 7.34 billion rupees, while sales rose 2.5 per cent from a year earlier to 106.7 billion rupees.
Hindalco is benefiting from Prime Minister Narendra Modi’s “Make in India” program that’s driving manufacturing growth and infrastructure spending, and boosting aluminum capacity and demand. Domestic prices of copper, which accounts for 20 per cent of Hindalco’s revenue, rose after the closure of a smelter belonging to rival Vedanta Ltd. sent buyers scrambling for supplies.
Adding to optimism are predictions this month by Goldman Sachs Group Inc. that global metal prices are forming a bottom as China’s policy easing supports economic activity.
The company boosted profits because of a strong economy, higher prices and stable operations despite challenges from higher input costs and increased imports of aluminum and copper, it said in the statement.
Hindalco’s US unit Novelis Inc. earlier this week reported a nearly 10 per cent increase in first-quarter profit to $113 million from a year earlier. The company’s recent investments in North America and Asia along with the pending acquisition of Aleris Corp. will diversify its product portfolio and give it access to high-value, high-demand markets, it said.
Source: Economic Times