Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Indian aluminium and copper producer Hindalco Industries reported a drop in production volume and sales in Q2 (July-September) FY21, but a rise in EBITDA to Rs46.72bn($628.8mn), up by 25pc from the prior-year period. 


Its Q2 results were supported by good performance by Novelis and India Aluminium businesses. The company shared that the EBITDA rise of Novelis was supported by its performance in beverage cans and the demand revival in the automotive sector in the US and Asia. 



It achieved aluminium metal production of 307,000mt, down by 53.97pc from 667,000mt from the prior-year period. The sales volume of aluminium VAP excluding wire rods were at 63,000mt, down 19.23pc from 78,000mt in Q2 FY2020.

EBITDA stood at Rs10.66bn($143.47mn) crore in Q2 FY21, compared with Rs8.49bn for the prior-year period, up by 25.55pc on favourable macros and lower input cost. The company’s revenue dropped to Rs47.96bn down by 13.21pc from Rs55.26bn in Q2FY20.The revenue rose by 7.87pc from Rs44.46bn in April-June quarter in 2021. 



Copper cathode production rose to 73,000mt, down by 13.09pc from 84,000mt in Q2 FY2020. The cathode production in Q2 showed 76pc rise from 41,000mt caused by disruption due to the COVID-19.

Copper metal sales dropped by 8.53pc to 75,000mt in Q2, 2021 from 82,000mt in the prior-year period. Copper Value Added Product Sales were at 64,000mt, up by 1,000mt from 63,000mt in the prior-year period. 

EBITDA for the copper business was at Rs2.08bn ($27.99mn), down from Rs263 crore in the prior period. The revenue from the copper business stood at Rs47.74bn ($642.53mn) in Q2 FY2021, up by 7.30pc from Rs44.49bn in the prior-year period.



Novelis recorded adjusted EBITDA of $455mn, up 21.65pc from $374mn in the prior-year period supported by higher volumes, cost control, better product mix and EBITDA contribution from the acquired Aleris business. 

Revenue rose to $3bn in Q2 2021, up by 3.44pc from $2.9bn supported by higher LME and premiums. The total shipments of flat-rolled products rose to 923,000mt, up by 10.53pc from 835,000mt on the back of revival of demand across segments, except aerospace.


New developments

While announcing Q2 results, Hindalco Industries shared that it has completed the divestment of Duffel plant to Avlance and inked-in the agreement for the sale of Lewisport to American Industrial Partners, a private equity firm for $171mn net cash proceeds. 

Novelis’ beverage can business in Brazil is expected to be commissioned in FY22. The company resumed Novelis’ automotive finishing line expansion at Guthrie, Kentucky and Changzhou, China. The shipments will commence by year-end and in early FY22, respectively.  Utkal Alumina capacity expansion of 500,000mt is expected to be commissioned in Q4, 2021. 


($1= Rs74.30)


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