India's Hindalco posts 63% slump in profit on high costs, low prices

BENGALURU, Feb 9 (Reuters) - Hindalco Industries , one of India's largest producers of aluminium and copper, reported a bigger-than-expected 63% drop in quarterly profit on Thursday, hurt by higher costs and a fall in aluminium prices. Benchmark London Metal Exchange aluminium have fallen off the record highs hit in early 2022, sliding over 15% slide so far into this year due to factors such as the Russia-Ukraine conflict, recessionary fears and China's zero-covid policy. Hindalco, owned by conglomerate Aditya Birla Group, said consolidated net profit fell to 13.62 billion rupees ($165 million) in the third quarter ended Dec. 31, from 36.75 billion rupees a year earlier. Analysts, on average, had expected profit to decrease to 17.05 billion rupees, according to Refinitiv IBES data. Novelis, Hindalco's U.S. unit and the world's largest producer of rolled aluminium products, on Monday, reported a 33% fall in core profit for the December-quarter due to higher costs and inventory destocking in the beverage packing market. The profit contribution from Novelis, which accounts for almost 42% of Hindalco's total profit, dropped 25% in the quarter. Profit at Hindalco's aluminium upstream segment, which includes bauxite and coal mining, more than halved. The business is the second biggest profit contributor. The Mumbai-based company, which has 50 plants across 10 countries, said revenue from operations climbed 5.7% to 531.51 billion rupees due to high volumes. But that was more than negated by a roughly 15% jump in total expenses, with power and fuel cost surging 53.8%.

($1 = 82.5080 Indian rupees) (Reporting by Ashish Chandra in Bengaluru; Editing by Savio D'Souza)