Hindalco shares crack 6% as US-based arm Novelis reports 18% fall in Q2 profit

Over the past year, Hindalco shares have seen a 12-month run of around 37 percent, as against 26 percent gain in the frontline index Nifty 50.

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26 Aug, 2025 12:21

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Metals major Hindalco saw its shares tumble over six percent during the early session after its US-based subsidiary Novelis Inc reported a fall in net income for the July-September quarter.

The US-based aluminium producer posted an 18 percent decline in net income to $128 million in the September quarter of 2024-25.

The decline comes as a result of a $61 million charge associated with the production interruptions at its Sierre plant, along with higher restructuring and impairment expense and lower operating performance, Novelis said on November 6.

Net sales for the second quarter rose by 4.5 percent to $4,295 million over $4,107 million in the year-ago period.

The EBITDA per tonne stood at $489/t during the quarter, and the adjusted EBITDA stood at $462 million. The EBITDA decline was primarily driven by the increase in aluminum scrap prices, unfavorable product mix, and the impact caused by floods at the Sierre plant.

At 9.20 am, shares of Hindalco were quoting Rs 663.75 on the NSE, lower by over 6.3 percent as investors exited their holdings.

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Domestic brokerage Emkay Global downgraded Hindalco to 'sell' from 'reduce' following a disappointing outlook from Novelis.

"We were not convinced with its steep EBITDA/t improvement trajectory in the medium term. With the company now withdrawing its EBITDA/t guidance over concerns surrounding accelerating tightening of scrap spreads with liberalization of scrap import by China, we think it creates a near-term overhang for the stock," said Emkay Global.

The brokerage shared a price target of Rs 600 per share, which indicates a downside of 15 percent from the previous session's closing price.

Over the past year, Hindalco shares have seen a 12-month run of around 37 percent, as against  26 percent gain in the frontline index Nifty 50.

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