Hindalco Industries and Sterlite Industries two leading players operating in the non-ferrous metal segment are witnessing pressure on margins due to lower aluminium prices on London Metal Exchange and also due to lower profit margins on refining of copper.

Hindalco Industries, Aditya Birla group’s flagship metal arm is likely to post subdued results in July to September quarter due to lower treatment and refining charges of for copper and also due to lower aluminium prices on the London Metal Exchange.

Mr Sanjay Jain analyst at Motilal Oswal said that “Hindalco Industries is expected to report decline in its profits and margins in July to September as aluminium prices were low on LME in the quarter. This affects the landed cost of imports for the white metal in the Indian market. In July to September, aluminium prices on LME declined by around 15% from a year ago to around USD 1,900 per tonne.”

Mr Jain said that he expects Hindalco’s earning before interest, taxes, depreciation and amortization to decline around 12% from a year ago to INR 590 crore. The company’s net profit is expected to decline by 18.8 per cent from a year ago to INR 406 crore while net sales are expected to decline by 1.2% from a year ago. TcRc margins too are expected to decline by around 10 per cent to around 17 cents per tonne.

Mr Ravindra Deshpande an analyst at Elara Capital also said that Hindalco is likely to report Ebitda margin of eight per cent as compared with 14% a year ago. Sales are expected to remain flat compared with a year ago while TcRc margin is expected at around 20 cents per tonne.

Source - Mydigitalfc.com

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