Hindalco Industries witnessed a sharp decline of 14% in its Share price following the announcement of its US subsidiary Noveli’s performance in the December quarter. While financials aligned with expectations, analysts expressed disappointment over the company’s increased capital expenditure (Capex) and extended project timeline.
Novelis reported stable demand in America but faced pressure in Europe and Asia. Despite meeting estimates for adjusted EBITDA in the third quarter of fiscal year 2024, the company’s decision to raise Capex by 65% to $4.1 billion and delay project completion to FY2027 led to concerns about returns.
Hindalco Share Drop 14 Percent Following Novelis Results (Us Subsidiary Noveli’s)
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Financially, Novelis’ net income surged to $121 million, compared to $12 million in the same period last year. However, a 6% decline in net sales, attributed to lower aluminum prices, and fluctuations in product shipments, raised caution among investors. Despite a temporary rise in adjusted EBITDA per tonne, concerns persist over the company’s future growth and return prospects.
Hindalco’s share opened 6.6% lower in premarket trading and further dropped by 15%, currently trading at 502, reflecting a loss of 14% for the day.
