BENGALURU (Reuters) – India’s Hindalco Industries, one of the country’s largest aluminium and copper producers, reported a 40% fall in first-quarter profit on Tuesday as softer volumes and weak metal prices weighed.
The company’s consolidated net profit fell to 24.54 billion rupees ($296.4 million) in the quarter ended June 30 from 41.19 billion rupees a year earlier.
With consumers largely cutting discretionary spending amid elevated global inflation, canned beverage shipments were curbed leading to soft aluminium sales during April-June.
Net sales in Hindalco’s U.S. unit Novelis, which accounts for over 63% of the company’s total revenue, fell about 20% to $4.1 billion in the quarter, it said last week.
Novelis, the world’s largest producer of rolled aluminium, reported a 25% year-on-year fall in core profit. The company said the drop was “primarily driven by lower shipments, cost inflation, and less favorable metal benefit from recycling.”
Additionally, a drop in prices of metals such as copper and aluminium during the quarter also hurt the profits of non-ferrous metal companies like Vedanta and Vedanta Group-owned Hindustan Zinc.
Hindalco’s aluminium upstream and downstream businesses experienced 7% and 11% declines in revenue, respectively, while its copper segment reported a 9% growth.
Shares of Hindalco, the flagship metals producer of the Aditya Birla Group, fell as much as 2.8% after the results and were among the top losers on the benchmark Nifty 50 index.
($1 = 82.7950 Indian rupees)
(Reporting by Varun Vyas in Bengaluru; editing by Eileen Soreng)