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Hindalco posts a flat bottomline in 3QFY00 - Views on News from Equitymaster
 
 
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  • Jan 31, 2000

    Hindalco posts a flat bottomline in 3QFY00

    Hindalco Limited has posted a growth of 16% in net sales even as the net profits grew by only 1%. The company has benefited from improved realisations and product mix as a 1% rise in volumes has boosted the topline by 16%.

    Hindalco (FY99 Sales Rs 17,670 m), an Aditya Birla Group Company, is the largest (Installed capacity 242,000 MTPA) and the lowest cost producer of aluminum in the country.

    (Rs m) 3QFY2000 3QFY1999 Change
    Net Sales 5,022.0 4,329.0 16.0%
    Other Income 345.0 376.0 -8.2%
    Expenditure 2,741.0 2,323.0 18.0%
    Interest 157.0 223.0 -29.6%
    Depreciation 347.0 301.0 15.3%
    Profit before Tax 2,122.0 1,858.0 14.2%
    Tax 595.0 350.0 70.0%
    Profit after Tax/(Loss) 1,527.0 1,508.0 1.3%
    Net profit margin (%) 30.4% 34.8%  

    The international aluminium prices have firmed up considerably over the last year. The company has thus benefited from improved realisations. Further to this, a conscious effort to improve the product mix has also enabled Hindalco to improve overall realisations. The 30% decline in interest expenditure has reduced the pressure on the bottomline.

    However, Hindalco has suffered a decline in net profit margins during the quarter. The main reasons from this are a sharp rise in operating costs, a decline in other income and a surge in tax provisions. As a consequence, net profits grew by a meagre 1%.

    The future scenario for the aluminium sector looks bright in view of the domestic and global demand recovery. Whether this will translate into higher prices or not will depend on size of the fresh (or closed) capacities going on stream.

    Market View:
    Analysts have recommended the stock as a 'BUY' mainly on account of the international and domestic price recovery in aluminum. Moreover, they favor the company's ability to produce aluminum at rates ($941 per ton), that are amongst the lowest in the world.

     

     

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    More Views on News

    Hindalco: Strong Performance at Operating Level (Quarterly Results Update - Detailed)

    Feb 22, 2017

    Hindalco Industries has reported a 14.5% YoY increase in the topline while the bottomline came at Rs 3.2 billion.

    Hindalco Industries: Strong Operational Performance Boosts Profitability (Quarterly Results Update - Detailed)

    Nov 30, 2016

    Hindalco Industries has reported a 1.1% YoY increase in the topline while the bottomline has accelerated by 255.4% YoY.

    Hindalco Industries: Cost Efficiency Boosts Profitability (Quarterly Results Update - Detailed)

    Aug 18, 2016

    Hindalco Industries has reported a 11.4% YoY decline in the topline while the bottomline has accelerated by 379% YoY.

    Hindalco Industries: A Stellar performance (Quarterly Results Update - Detailed)

    Jun 6, 2016

    Hindalco Industries has reported a 7.5% YoY decline in the topline while the bottomline has accelerated by 123.4% YoY.

    Hindalco Industries: Realisations Hurt Topline (Quarterly Results Update - Detailed)

    Feb 17, 2016

    Hindalco Industries has reported a 5.3% decline in topline while the bottomline has declined by 88.7%

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