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Playing A Role In India’s Growth

Hindalco expects the impetus provided by India’s growth to boost demand for aluminium

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Satish Pai, Managing DirectorHindalco Industries

Established in 1958, Hindalco Industries is the metals flagship company of the Aditya Birla Group. It describes itself as one that plays a big role in the life of every Indian — “from making every second can in the world to shaping automobiles, from aluminium kitchen foils to aluminium doors and windows, we are big in your life.”

Under the able stewardship of Satish Pai, Managing Director, Hindalco posted a net revenue growth of 13 per cent for 2018-19 and a “highest ever” consolidated operating profit (EBITDA) at Rs 16,627 crore, up 11 per cent versus Rs 15,025 crore in FY18, driven by stable operations, supporting macros and improved efficiencies. Though it witnessed a 10 per cent decline in its net profit compared to the year before, yet its net profit for FY19 stood at Rs 5,495 crore. Consolidated revenue stood at Rs 130,542 crore in FY19 compared to Rs 1,15,820 crore in FY18, registering a y-o-y growth of 12.71 per cent. Revenue from Indian business was up 6 per cent at Rs 45,908 crore in 2018-19, while PAT surged 38 per cent to Rs 2,678 crore.

Hindalco’s consolidated revenue for FY19 stood at Rs 130,542 crore compared to Rs 1,15,820 in FY18.

Satish Pai, Managing Director, Hindalco Industries said, “Our FY19 consolidated profits reached an all-time high in spite of a difficult business environment. This resilient performance reflects the strength of our integrated business model, excellent operational capabilities, stable operations and our enriched product portfolio.” The company’s India businesses (Hindalco standalone plus Utkal Alumina) generated revenue of Rs 45,908 crore for FY19. The EBITDA was at a record high of Rs 7,532 crore, a 5 per cent increase over the previous year. This spirited performance, despite a sharp rise in input costs, was on the back of stable operations, supporting macros and improved operational efficiencies, the company said. Interest expense declined 15 per cent YoY primarily due to prepayment of a term loan of Rs 1,575 crore and the re-pricing of long-term project loans.

Novelis delivered its best ever performance in FY19 with a significant year-on-year increase in net sales and adjusted EBITDA, says Pai. Revenue grew 8 per cent to $12.3 billion, driven by higher average aluminium prices, record shipments and an enriched product mix. Total shipments of flat rolled products grew 3 per cent to 3,274 Kt in FY19, with a 7 per cent growth in beverage can shipments and a 2 per cent growth in automotive body sheet shipments YoY. Adjusted EBITDA grew 13 per cent to $1.368 billion, compared to $1.215 billion in FY18, driven by higher shipments, operational efficiencies and a favourable product mix. Novelis leveraged its extensive recycling footprint and increased its recycled contents from 57 per cent to 61 per cent in FY19.

Pai took over as the CEO of Hindalco’s aluminium business in August 2013, with  his main focus being the ramp-up of the three mega greenfield projects that took alumina capacity to 2.7 MT and aluminium capacity to 1.3 MT. In February 2014, he was appointed the Deputy Managing Director of the company and was entrusted with Hindalco’s copper business. Pai became the Managing Director of Hindalco (including the Novelis business) in August 2016. Prior to joining the Aditya Birla Group, Pai worked with Schlumberger based out of Paris.

“Going forward, we expect the impetus provided by India’s growth to boost demand for aluminium. Rising imports of aluminium and copper, however, pose a threat and we look forward to suitable steps to provide a level playing field,” he added.

Explaining the market scenario in India Pai said: “Domestic market continues to witness robust growth in consumption at around 9.7 per cent in FY19. The transportation construction and consumer durable sectors were the major demand drivers other than the electrical sectors.”


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