The Aditya Birla Group-owned aluminium producer Hindalco Industries Ltd recorded a 700% rise in the net profit for the year to 31 March to Rs3,925.5 crore despite a fall in revenues.
A $578 million （Rs2,687.70 crore） gain on forex derivatives contributed to the profit.
The company blamed the fall in revenue on lower aluminium prices and weak demand for the metal in the first six months of 2009-10.
Revenue from aluminium fell but copper business did well. “Aluminium business revenue fell by 11% to Rs48,091 crore. Copper business revenue increased by 13% to Rs12,575 crore,” a company statement said.
Revenues at Novelis Inc., the US-based aluminium rolls and recycled cans maker, also fell 15% as net sales dropped to $8.7 billion to $10.2 billion.
“The one-time forex gain is the main reason for the rise in profit,” said Eric Martins of Mumbai-based brokerage Systematix Shares and Stocks India Ltd. “This year we expect the business to do better because aluminium realizations will improve further in 2010 compared to 2009,” he added.
“Even though our shipments dropped by 2%, increase in productivity, change in product mix, price increase for fresh contracts and cutting costs improved our profits,” managing director Debu Bhattacharya said. “We have achieved our cost cutting target of $140 million two quarters ahead of estimated time.”
Hindalco said it was more positive on Novelis following the success of cost cutting measures and it would increase investments in the aluminimum can maker.
Hindalco shares rose 1.23% on the Bombay Stock Exchange to close at Rs147.85 apiece; the benchmark Sensex index rose 0.56% to 17,117.69.
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