This is despite a 27.3 per cent drop in other income and a 47.9 per cent increase in interest cost, reflecting higher quality of earnings.

Net sales rose to Rs 1,473.3 crore against Rs 1,157.1 crore in 1996-97. Net profit increased to Rs 496.2 crore for 1997-98 as compared with Rs 391 crore recorded in the previous year.

Turnover was propped by two price rises in the last fiscal with primary metal prices increasing by almost Rs 10,000 per tonne. Prices of high-margin semi-fabricated products, which contributed around 50 per cent to the company's turnover, also increased substantially. Hindalco's production of primary metal was its highest ever at 2,00,304 tonne in the last fiscal against 1,66,272 tonne in the previous year.

The board has recommended a dividend of Rs 5.25 per share against Rs 4.50per share paid last year. Commissioning of all the captive power units brought down the cost of power, which contributes around 30 per cent to the production cost.

The company is also selling excess power to the UP state grid. Other income was lower at Rs 127.5 crore compared to Rs 175.4 crore in 1996-97. Hindalco's interest cost increased to Rs 72.3 crore against its previous Rs 48.9 crore.

Depreciation rose to Rs 77.6 crore from Rs 42.3 crore owing to the commissioning of a string of manufacturing units throughout the year. Provision for taxation was lower at Rs 87 crore against Rs 119.5 crore paid last year. Earnings per share increased to Rs 66.64 compared to Rs 52.5 in the previous year.

The company's production of value-added products increased substantially. Production of rolled products increased 86.8 per cent, extrusions 5 per cent, and that of redraw rods by 7.5 per cent.

Hindalco also commissioned the 5,000 tonnes-per-annum foils plant, expected to boost margins significantly in 1998-99,president Askaran Agarwala said.Agarwala expected international aluminium prices to be over $1,550 per tonne. This, he said, will increase realisations further as domestic prices can also be increased.

If the rupee weakens against the dollar, Hindalco will stand to gain, he added. This is because a weaker rupee will make imports prohibitive, and also increase export earnings. Domestic demand, as per Hindalco's projections, is expected to grow at around 8-10 per cent against a drop in demand in 1997-98.

Foray into aluminium-alloy wheels likely

MUMBAI, May 9: Hindalco has decided to foray into aluminium alloy wheels. Company president Askaran Agarwal said the process for setting up a plant at Silvassa has been initiated.

The company has tied up with Stahlschmidt & Maiworm GmbH of Germany for technical collaboration. The plant, envisaged at Rs 79.5 crore, will have a capacity to produce 300,000 wheels annually. This can be raised to over 500,000 tonnes at a later stage, Agarwala said. Productionis expected to commence in a year's time.

If the domestic automobile market does not pick up, the there is a huge export market to be tapped, Agarwala said. Hindalco has also initiated a feasibility study for manufacturing aluminium cans and die-wheel casts.

Hindalco has appointed Kaiser Aluminium of US for conducting a techno-economic feasibility study for the Rs 8,000-crore Aditya Aluminium project. Kaiser is expected to submit its report in the second quarter of the fiscal. Issue of fresh equity shares to raise around Rs 1,000 crore for part-funding the project is also being studied.