Nov. 6 (Bloomberg) -- Hindalco Industries Ltd., India’s second-largest aluminum maker, reported a 29 percent drop in profit in its fiscal second quarter as metal prices fell.
Net income, excluding unit Novelis Inc., declined to 3.59 billion rupees ($66 million) in the three months ended Sept. 30 from 5.03 billion rupees a year earlier, the company said today in a statement. The median profit estimate of 29 analysts polled by Bloomberg was 3.72 billion rupees. Sales fell 1.8 percent to 62.2 billion rupees.
Base metals fell on the London Metal Exchange in the last quarter. The average price of aluminum, the lightweight metal used to make aircraft and beverage cans, declined 20 percent from a year earlier, while copper, which the company also produces, fell 14 percent. The rupee fell 17 percent in the quarter from a year earlier, according to data compiled by Bloomberg.
The depreciation of the Indian rupee partially countered declining prices as Hindalco pegs its sales in India to rates on the LME, which denominates contracts in dollars. Total expenses rose to 58.2 billion rupees from 57.9 billion rupees during the quarter, while income from sources other than the main business fell to 1.32 billion rupees from 1.85 billion rupees, it said.
The company, controlled by billionaire Kumar Mangalam Birla, in September got financing for the 131.95 billion rupee Aditya Aluminium smelter project in the eastern state of Odisha. The company borrowed the rupee-denominated loan at an annual interest rate of 11.25 percent.
Hindalco shares declined as much as 2.6 percent to 111.55 rupees and traded at 113.05 rupees as of 2:20 p.m. in Mumbai. The shares have dropped 2.1 percent this year, compared with a 21 percent increase in the benchmark Sensitive Index.
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