The strong third quarter is due to robust performance by Novelis and domestic aluminium business, which was supported by higher volumes and better product mix, lower input costs, stability in operations and cost saving actions, Hindalco Industries Managing Director Satish Pai told reporters in a virtual press conference.
"The demand has been back globally during the third quarter to the pre-COVID levels in every sector. Novelis achieved record shipments, driven by strong demand across product end markets. The India business delivered an excellent performance with aluminium value-added products continuing to record higher volumes," Pai added.
Going forward, he stated that the vaccination is being rolled out, which will give further confidence so the company is quite bullish on the demand for the next financial year.
In the last quarter of FY21, Pai said "Q4 demand a million tonnes of aluminium is more or less where the capacity demand is currently. So, in Q4 the demand will be at the Q3 levels."
Talking about prices, Pai stated that it is dependent on LME (London Metal Exchange) and is currently trading at USD 2,000 per tonne level and is expected to be in the USD 1,900-2,000 tonne level during the fourth quarter.
Further, he said, the inclusion of the Aleris business has positively impacted the overall top line and EBITDA, with realisation of synergies at USD 54 million on a run-rate basis in the third quarter.
Meanwhile, the company is planning to come out with a capital allocation strategy soon, Pai stated without elaborating on the amount.
"We believe that cash flow generation is going to be good. So we are going to sort of describe how we will invest that money into a growth capex to reduce our net debt, as well as distribution to shareholders. So this capital allocation strategy will be laid out in the coming weeks," he said.
The standalone net debt of Hindalco is Rs 14,800 crore and that for Novalis is Rs 47,500 crore.
Shares of the company ended 0.38 per cent higher at Rs 279.35 apiece on BSE.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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