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Hindalco Profit Surges on Higher Metal Prices (Update1)
May 12,2010 08:54CST
industry news

MUMBAI, May 11 -- Hindalco Industries Ltd.'s fourth- quarter profit more than doubled as India's largest aluminum producer benefited from rising prices of base metals including aluminum and copper.

Net income surged to 6.63 billion rupees ($147 million) in the three months ended March 31 from 2.69 billion rupees a year ago, the company said in an e-mailed statement. Sales rose 43 percent to 54 billion rupees.

The average price of aluminum gained 57 percent to $2,199 a ton on the London Metal Exchange in the last quarter as demand for the lightweight metal rose. Hindalco, also India's second- biggest copper producer, benefited from higher prices of the metal used in appliances such as refrigerators. The average copper price on the LME more than doubled in the March quarter.

"We were expecting good results as prices of aluminum and copper had risen in the March quarter," said Giriraj Daga, who has a "buy" rating on the stock at Khandwala Securities Ltd. in Mumbai.

Total costs, including electricity expenses that account for about 40 percent of the cost of smelting aluminum, rose to 47.4 billion rupees from 36.3 billion rupees in the quarter, the company said.

Aluminum will likely end the year at $2,700 a ton, compared with a previous forecast of $3,000, research group Harbor Intelligence said on May 9.

Aluminum production in China, the world's largest consumer of the metal, jumped 57.4 percent to 1.37 million tons in April, according to Mainland Marketing Research Co.

Shares of Hindalco, which had fallen as much as 3.85 percent in Mumbai trading, pared their losses. The shares dropped 2.5 percent to 171.10 rupees as of 2:14 p.m. in Mumbai. The benchmark Sensitive index fell 1.1 percent.



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