Hindalco's Q1 net nudges up, lags f'cast

MUMBAI - India's top aluminium producer, Hindalco Industries, reported a slight and below-forecast rise in June quarter net profit despite higher metal output as lower prices hurt margins. Chairman Kumar Mangalam Birla said the company hoped to gain from rising aluminium demand, with domestic consumption likely to grow by 8-9 percent in the fiscal year to March 2008. That would be in line with global trends. Canada's Alcan Inc said on Tuesday that world primary aluminium consumption was likely to increase 10.1 percent in 2007. "In India, government's focus on infrastructure, as well as growing importance of India as a global manufacturing hub for automobiles, will propel aluminium growth in the country," Hindalco said in a statement. Hindalco, which bought Canada's Novelis in a $6 billion deal this year, said standalone net profit for the June quarter rose to 6.03 billion rupees, from 6.02 billion reported a year earlier. Net sales rose to 46.78 billion rupees from 42.74 billion while primary metal production rose 8.3 percent to 116,169 tonnes, the company said. A Reuters poll of 10 brokerages had forecast net profit of 6.26 billion rupees on sales of 47.46 billion. Hindalco's chief financial officer, S. Talukdar, said the integration of Novelis had begun, but full the benefits of the acquisition would only accrue after 2010. State-run rival National Aluminium Co. Ltd. on Monday reported a 28 percent fall in quarterly net profit from a year earlier. Aluminium prices, stable in recent months while other metals have hit records, are expected to rise, supported by growing Chinese demand. Analysts say Rio Tinto Plc's friendly $38.1 billion bid for Canada's Alcan, which would create the world's biggest aluminium producer, supports expectations of higher aluminium prices. Company officials said that although LME prices were "almost stable", Hindalco sold metal at lower prices because customs duties had been reduced and a rise in the rupee hurt its selling price, which is pegged to LME rates in foreign currency. Shares in Hindalco, valued at more than $5 billion at Monday's close, rose 22.9 percent during April and June, outperforming a 12.1 percent rise in the benchmark index.