MUMBAI, May 9 -- Indian non-ferrous metals producer Hindalco Industries (HALC.NS: Quote) on Monday beat market estimates with a 7 percent rise in fourth quarter net profit and said it expected strength in prices and volumes to continue, but spiralling input costs were a concern.
The firm, part of the diversified Aditya Birla Group, said it expected aluminium demand in India to grow 8-9 percent in 2011/12, while the copper market was also likely to be positive due to a robust trend in automobiles and infrastructure sectors.
"Better geographic and product mix along with higher LME (London Metal Exchange) and better copper volume have been the main performance drivers," it said.
Hindalco, India's largest aluminium maker expects global aluminium and copper prices to remain at high levels in 2011, helping its margins.
Metal prices have risen sharply over the past few months on the back of demand from developing economies like China and India and also due to rising costs.
Copper futures CMCU3 struck a record high in February, on forecasts of a global shortage for the metal used in power and construction. They have since retreated after the Middle East crisis and the earthquake in Japan.
Aluminium futures CMAL3 on the London Metal Exchange (LME) are up nearly 6 percent so far in 2011.
Hindalco, which gets 60 percent of its revenue from copper, said revenues rose 38 percent for the segment to 46.4 billion indian rupees ($1.04 billion) but higher energy costs and lower processing charges impacted profit.
In the aluminium segment, however, profit was lower from a year earlier due to higher coal costs and an appreciating rupee, it said.
Q4 NET RISES
Hindalco posted a net profit of 7.08 billion rupees in its fiscal fourth quarter while net sales rose nearly 27 percent to 68.5 billion. A Reuters poll had estimated standalone net profit from Indian operations at 5.8 billion rupees.
Its Canadian unit Novelis, will report quarterly earnings later this month.
The company, which gets 40 percent of its Indian revenue from aluminium, is trebling capacity in the country to 1.9 million tonnes by 2013 at a cost of about $5 billion.
In March, it tied up funds for a $2.4 billion aluminium smelter and power plant project at Mahan in central India, where it setting up a 359,000 tonnes/year greenfield aluminium smelter, along with a 900 Megawatts captive power plant.
Hindalco shares closed up 0.5 percent at 202.60 rupees in a firm Mumbai market.