Hindalco Industries shares fell more than 5% on Thursday after its US-based subsidiary Novelis Inc. reported weaker-than-expected quarterly earnings. Despite a 10% year-on-year rise in net sales to $4.7 billion, the aluminium major’s performance was hit by lower shipments, higher costs, and one-off impacts.
Total shipments of flat rolled products stood at 941 kt, marginally down from 945 kt last year. EBITDA declined to $422 million from $462 million, while per-tonne EBITDA slipped to $448 from $489.
Novelis also faced a $54 million negative impact from Trump-era tariffs, nearly double the $28 million impact in the previous quarter. Additionally, the recent fire at its Oswego plant is expected to affect cash flows by $550–650 million and EBITDA by $100–150 million, though the company expects 70–80% recovery through insurance in FY26.
The company’s net debt rose to $5.8 billion, its highest level in over five years, prompting Hindalco to infuse $750 million into Novelis. Meanwhile, cost estimates for the 600 KTPA Bay Minette project in the US have surged from $2.5 billion initially to $5 billion, driven by inflation and execution challenges.
Overall, Novelis expects FY25 capex between $1.9 billion and $2.2 billion, with a net leverage ratio of around 3.5x. The weak performance and higher debt levels have raised investor concerns, leading to the sharp fall in Hindalco shares on the stock exchanges.
Hindalco Industries shares were down 4.88% at ₹790.85 apiece around 9.30 am. It has rallied 33.38% this year, so far.
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