Last updated: 18 Aug, 2020 | 08:20 am
Loss widens: Hindalco Industries has reported a consolidated loss of ₹709 crore, as the volumes fell in Q1FY21 due to the imposed lockdown. Revenue from operations declined 16% on-year to Rs 25,283 crore. The India business reported its first-ever loss in 18 quarters.
Aluminium business resilient: “Despite the pandemic, Hindalco’s Aluminium business showed resilience in the quarter. Aluminium India Business EBITDA came in at a robust ₹856 crore, with an industry-best EBITDA margin of 19.3%, up 380 bps.” The company said that its Aluminium India smelters operated at more than 90% capacity during the lockdown.
US subsidiary affected: The company's U.S. subsidiary Novelis Inc., too, reported a loss in the quarter ended June, driven by higher finance costs and depreciation burden. However, the company said that s. Novelis’ automotive customers across regions are trending upwards, towards reaching pre-pandemic production levels, with record automotive shipments in China.
The disruption caused by the pandemic has impacted the Q1 results of metals companies. While the revenues were lower, Hindalco’s cost cuts during the quarter helped shore up operating profits. The company has said that it is seeing green shoots both in domestic and international markets, and is ready to handle the rise in demand going forward.
Consensus recommendation: Buy (Based on views of 22 analysts from external institutions)