India's Hindalco posts 40% slump in Q1 profit on weaker volumes, metal prices

BENGALURU, Aug 8 (Reuters) - Indias Hindalco Industries (HALC.NS), one of the countrys largest aluminium and copper producers, reported a 40% fall in first-quarter profit on Tuesday as softer volumes and weak metal prices weighed.

The companys 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 Hindalcos U.S. unit Novelis, which accounts for over 63% of the companys total revenue, fell about 20% to $4.1 billion in the quarter, it said last week.

Novelis, the worlds 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 (VDAN.NS) and Vedanta Group-owned Hindustan Zinc (HZNC.NS).

Hindalcos 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 (.NSEI) index.

($1 = 82.7950 Indian rupees)

Reporting by Varun Vyas in Bengaluru; editing by Eileen Soreng

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