Hindalco Industries Ltd. (HNDL), India’s second-largest aluminum maker, reported a worse-than-expected 16 percent gain in second-quarter profit because of higher raw material costs and said it expects a “difficult” second half.
Net income climbed to 5.03 billion rupees ($100 million) in the three months ended Sept. 30 from 4.34 billion rupees a year earlier, the company said today in a statement. The median profit estimate of 26 analysts polled by Bloomberg was 5.35 billion rupees. Sales grew 7 percent to 62.2 billion rupees.
Raw material and fuel costs jumped 21 percent to 51.7 billion rupees during the quarter because of higher coal costs, the company said. Power-generating coal gained 29 percent to an average $121 a metric ton in the quarter from a year earlier, according to researcher McCloskey Group Ltd.
“The second half of the current fiscal year will be difficult due to global uncertainties, falling LME prices and persisting cost pressures,” the company said in the statement.
Income from sources other than the main business more than doubled to 1.76 billion rupees on better treasury yields, it said. Hindalco, controlled by billionaire Kumar Mangalam Birla, benefited from a 15 percent increase in aluminum and 24 percent gain in copper prices on the London Metal Exchange in the last quarter.
Hindalco shares declined 3.8 percent to 134.50 rupees in Mumbai yesterday. The shares have dropped 46 percent this year, compared with a 15 percent drop in the benchmark Sensitive Index. The exchanges are closed today on account of a holiday.
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