Hindalco Q2 net profit seen up 25%; Stock rallies over 2%

NEW DELHI: Hindalco Industries Ltd gained as much as 2.5 per cent in a weak market on Tuesday ahead of its results for the quarter ended September 30.

The world's largest aluminium rolling company is expected to report a 25 per cent YoY increase in net profit to Rs 450 crore for the second quarter if the fiscal year 2014, as compared to Rs 359 crore reported in the year-ago period, according to an ET Now Poll.

Net Sales for the company are likely to come in higher to Rs 6,850 crore or 11 per cent for the quarter ended September 30, as compared to Rs 6163 cr reported in the year-ago period.

Operating profit margins (OPM) is expected to expand at 9.5 per cent as compared to Rs 8.5 per cent reported in the year-ago period.

At 11:40 a.m.; Hindalco was trading 1.8 per cent higher at Rs 113.50. It hit a high of Rs 114.25 and a low of Rs 112.15 in trade today.

However, Hindalco’s subsidiary Novelis reported weak operating performance for 2QFY2014 on Monday. The company’s top-line was flat YoY at US$2,427mn.

The management expects to maintain FY2013 EBITDA with a strong 2HFY14, driven by higher volumes in South America and strong auto demand in Europe.

The aluminium shipments in 2QFY2014 declined 1.0 per cent YoY to 713kt. The EBITDA also declined by 17.6 per cent YoY at US$228mn and therefore the company's PAT declined by 53.0 per cent YoY to US$23mn.

Analysing the results, Angel Broking maintains ‘Neutral’ rating on Hindalco.