MUMBAI (NewsRise) -- Hindalco Industries, India's largest aluminum producer, posted a more-than-37% slump in fourth-quarter net income, weighed by falling metal prices and higher input costs.
The weak results of Hindalco, which also produces copper, underscore the falling metal prices amid fears of a global economic slowdown. Earlier this year, the International Monetary Fund cut its global economic growth forecast for 2019 and 2020 due to weakness in Europe and some emerging markets. A prolonged trade war between the U.S. and China also damp the outlook for industrial commodities.
According to Edelweiss Securities, prices of aluminum on the London Metal Exchange were down for the third consecutive quarter with a 14% decline. Globally, Hindalco has been expanding through its U.S. unit Novelis, which last year agreed to buy Aleris in a $2.6 billion deal.
Hindalco, controlled by billionaire Kumar Mangalam Birla, said its standalone net profit in the January-March quarter stood at 2.36 billion rupees ($33.7 million), compared with 3.77 billion rupees in the year-earlier period. Revenue from operations grew 5.9% to 123.73 billion rupees. Total costs rose about 9%.
The company said uncertain trade and global economic environment adversely impacted prices of aluminum, with smelters across the globe under pressure.
Last week, Hindalco's rival Vedanta reported a 45.5% drop in profit hurt by a drop in commodity prices and shutdown of its copper smelter in southern India's Tamil Nadu state.
"We see the sector at crossroads with global demand showing limited recovery on one hand and growing optimism on trade talks between the U.S. and China on the other," Edelweiss said in a report last month. "We continue to closely watch demand indicators in China in a seasonally strong phase."
Shares of Hindalco closed 2% higher in Mumbai trading, while the 30-stock benchmark Sensex added 0.8%.
--Gurdev Singh Virk