Hindalco Q1 results preview: Net profit likely to fall 47% to Rs 2,190 crore owing to lower metal prices

Aditya Birla group metal company Hindalco is scheduled to report its financial results for the April-June period on Tuesday, August 8. Analysts expect the Mumbai-based company — a manufacturer of aluminum and copper — to report a weak set of numbers owing to falling metal prices.

According to Zee Business research, Hindalco is expected to report a consolidated net profit of Rs 2,190 crore for the quarter ended June 30, translating to a fall of 46.8 per cent compared with the corresponding period a year ago. The analysts estimate the metal major's revenue for the first quarter of the current financial year at Rs 53,263 crore as against Rs 58,018 crore for the year-ago period. 

Hindalco's quarterly earnings before interest, taxes, depreciation and ammortisation (EBITDA) at Rs 5,378 crore, a fall of 36.2 per cent on a year-on-year basis, according to the research. 

Zee Business analysts peg the company's margin — a key measure of profitability — to shrink to 10 per cent from 14.5 per cent a year ago. They expect the company's aluminum and copper EBITDA to decrease 43 per cent and 23 per cent on a year-on-year basis respectively. 

The analysts estimate its subsidiary Novelis to see a 48 per cent drop in quarterly net profit. 

How Hindalco performed in the March quarter

For the final quarter of the last financial year, 2022-23, Hindalco reported a 37.4 per cent year-on-year drop in net profit to Rs 2,411 crore. Its revenue came in at Rs 55,857 crore for the March quarter as against Rs 55,764 crore for the corresponding period a year ago, according to a regulatory filing. 

The company's margin contracted by 350 basis points to 9.5 per cent. 

Hindalco shares

Hindalco shares finished the June quarter 3.9 per cent higher, underperforming gains of 10.5 per cent and 12.9 per cent in the Nifty and the Nifty Metal respectively.  

As of August 7, the Hindalco stock had declined 4.7 per cent so far in 2023, in contrast to a 7.7 per cent rise in the Nifty.

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