Hindalco Q3 Profit Falls 63% On Higher Costs, Lower Metal Prices

Ebitda at ₹3,930 crore fell 48% from a year earlier. Consolidated revenue stood at ₹53,151 crore, up 6% from a year earlier due to better realization and increased volumes in India operation. Ebitda stands for earnings before interest, taxes, depreciation and amortization.

US subsidiary Novelis’ business saw significant impact of higher input costs and lower volumes, pulling down overall performance. Lower shipments, higher inflationary pressures and less favourable metal benefits from recycling meant that Novelis’ reported Ebitda at $341 million was 33% lower compared to $506 million in Q3FY22.

“We are seeing core industries worldwide being buffeted by macroeconomic and inflationary cost pressures. Though the India aluminium upstream business Ebitda came under pressure from the surge in input costs and lower realizations, this was partially offset by higher volumes," Satish Pai, managing director, Hindalco Industries, said.

The Indian aluminium downstream business delivered higher Ebitda due to increased volumes and better pricing, Pai said. The copper business recorded a 40% growth in Ebitda, driven by higher volumes and better realizations, supported by robust domestic demand.

Novelis witnessed unprecedented inflationary pressures, unfavourable foreign exchange rates and lower shipments; this was partially offset by higher pricing and a favourable product mix, added Pai.

The focus of the company will remain at normalized performance of Novelis. Pai expects Novelis’ performance to improve in Q4 and normalize by Q1FY24.

The India performance is already improving and upstream business that saw significant pressure in Q2 saw better operating performance in Q3.