Hindalco shares tumble 7% as recycling arm Novelis logs weak Q2 numbers

Shares of Hindalco today fell by 7% to an intraday low of Rs 657.65 on the BSE after the company’s wholly-owned subsidiary Novelis posted an 18% YoY drop in its net income attributable to the shareholders.

The same stood at $128 million.

The net income attributable to the common shareholder, excluding special items was reported at $179 million, down 1% YoY.

The company reported that the adjusted EBITDA stood at $462 million, which was down by 5% YoY and up by 1% excluding the negative $25 million net impact from Sierre flooding.

Meanwhile, the adjusted EBITDA per tonne shipped stood at $489, which shows a decline of 6% YoY.

Net sales for the second quarter of fiscal year 2025 increased 5% versus the prior year period to $4.3 billion, mainly driven by higher average aluminum prices and a 1% increase in total flat rolled product shipments to 945 kilotonnes. “Our global footprint allowed us to achieve record beverage packaging shipments in the quarter and also mitigate the impact to customers from the flooding-related outage at Sierre,” said Steve Fisher, president and CEO of Novelis.”We also remain committed to sustainability and our goal of becoming carbon neutral by 2050. Our recently released fiscal year 2024 sustainability report highlighted the progress against this target and the 63% average recycled content rate in our products – a leading figure for the industry. Our success in these areas is the result of innovative approaches and technologies, and strong relationships with our customers who increasingly demand high-recycled content, lower-carbon aluminum products,” he added.

Post Novelis’ Q2 update, domestic brokerage firm Nuvama gave out a ‘hold’ rating for Hindalco with a target price of Rs 679, down from Rs 695 earlier.

“Excluding the one-off impact of $25 million pertaining to flooding at its Switzerland facility, Novelis reported adjusted EBITDA of $487 million (against the Nuvama estimate of $499 million), up 1% YoY. This led to EBITDA/t of $ 502 ($519 in Q2FY24),” said Nuvama in its report.

“Additionally, the management withdrew their short-term EBITDA/t guidance, which is a negative. While Nuvama cut Novelis’s FY25E/26E EBITDA by 4%/5%, the consolidated

EBITDA has increased by 2%/3% factoring in higher alumina prices,” the domestic brokerage firm added.

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