25 January 2007

Record results from Hindalco in the third quarter
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• Continuing growth in revenue: 62 per cent YoY
• EBIDTA soars by 76 per cent to Rs.1103.8 crore
• Net profit at Rs.643.9 crore, up 92 per cent YoY

Hindalco Industries Ltd, the flagship company of the Aditya Birla Group, has reported a
sterling performance for the quarter ending December 2006. Its net sales at Rs.4656.2 crore is up by 62 per cent over Q3 of FY06 at Rs.2872.7 crore. Profit before tax at Rs.895.5 crore soared by 106 per cent while profit after tax at Rs.643.9 crore shot up by 92 per cent in comparison to Q3 of FY05.

On the back of strong aluminium prices on the LME, coupled with an improved product mix
on account of higher sales of value-added products and focus on speciality alumina,
aluminium business revenues expanded from Rs.1563.4 crore to Rs.1795.8 crore, a rise of 15 per cent.

Despite strong inflationary pressures, profit before interest and tax went up from Rs.542.1 crore to Rs.755.5 crore, an increase of 39 per cent.

In the copper business, revenues escalated by 119 per cent from Rs.1308.4 crore to Rs.2862.2 crore. Profit before interest and tax at Rs.159.5 crore witnessed a swing of Rs.244.0 crore from the loss of Rs.84.5 crore posted in Q3 of the previous fiscal. The performance improvement was driven by good performance from the third smelter at Dahej and relatively higher TcRc margins.

Operational review
Aluminium
Both alumina and aluminium continued to operate at high utilisation levels and above their
rated capacities. Rolled products output strengthened due to better performance from the
rolling plants as also the acquisition of the rolling mill at Mouda. Extrusion output showed
significant improvement due to total capacity utilisation of the new extrusions press
operating at Renukoot since April 2006. Value-added production as a percentage of total primary metal production was at 67 per cent vis-a-vis 59 per cent during Q3 FY06.

Copper
The production of copper cathodes went up by 65 per cent to 72,904 t, vis-a-vis Q3 of the previous year. The performance of the third smelter at Dahej was very good as it operated at rated capacity after November 2006. However, operations at Copper II have been temporarily suspended from end of October 2006, keeping the overall economics in view largely the un-remunerative price of copper concentrate in the international market. Production of CC rods gained by 9 per cent to 24,669 t during the same period. Sulphuric acid output surged by 46 per cent to 1,90,493 t.

Expansion projects
Muri
The brownfield expansion of the alumina refinery from 110 ktpa to 450 ktpa is at an
advanced state of completion. It is expected to be commissioned in the first quarter of the
next fiscal.

Hirakud
The commissioning of Phase I of the expanded smelting capacity from 65 ktpa to 100 ktpa at Hirakud has been completed. All the 150 pots have been energised. Phase II of the project which will raise smelting capacity to 143 ktpa, is on track and is scheduled to go on stream in the first half of the next year.

Belgaum
For the expansion of the alumina refining capacity at Belgaum, Karnataka from 350,000 tpa to 650,000 tpa, the leases for bauxite mining are yet to be secured. The expansion plan is kept on hold until then.

Utkal
Work on this 1,500 ktpa alumina project is on track. The pile foundation for the
precipitation area is progressing. The layout of the non-plant buildings has been finalised.
Detailed engineering for mines has commenced. The second phase of the rehabilitation
settlement process is under way.

Aditya Alumina
For this greenfield integrated 1.5 million tpa alumina and 325 ktpa of aluminium
project, land acquisition is expected to be completed by June 2007. In principle approval has been obtained for SEZ status for the smelter.

Bargawan
This project envisages setting up of a 325 ktpa smelter and a 250 mw captive power plant supported by a captive coal mine. The proposed location in Bargawan is in the Sidhi
district of Madhya Pradesh. The topographical survey for the smelter is completed. In
principle approval has been obtained for SEZ status for the smelter and power plant. The coal mine will be in a joint venture with Essar Power, for which the mine plan is under finalisation.

Lathehar
For this project entailing the setting up a 325 ktpa aluminium smelter with 750 mw
captive power plant, supported by a 5 mtpa captive coal mine in Jharkhand, an
MoU was signed in March 2005 with the Government of Jharkhand. The allotment of the
coal block is awaited. An application for requisite land, water and necessary infrastructure
support has been submitted to Jharkhand state authorities.

Industry outlook
Aluminium
Globally aluminium demand has witnessed a growth of 7.7 per cent during the first nine months. The year promises to be strong in terms of price performance. Notwithstanding the possible slowing down of consumption in U.S., aluminium consumption in China remains the strong driver of price.

Copper
Copper prices continued to come down to more realistic levels with Chinese demand
decreasing considerably. In the coming year, availability of copper concentrate being tight,
the TcRc margins are likely to be under pressure.

Company outlook
The company has been improving its performance steadily. It is continuously leveraging its
fundamental strengths to deliver shareholder value. Hindalco will endeavour to deliver good
results despite severe inflationary pressures and wide fluctuations in the LME.