Share market update – The shares of Hindalco have fallen by 3.9% recently if we count the last five trading sessions. The stock has reduced its value by 11% over the last period of a month. The main reason behind this is supposed to be the incur of $61 million by Novelis due to the interruptions in the production at the famous Sierre Plant, among other things. Let’s know more about this.
The latest share market update
After Hindalco Industries’ US-based subsidiary announced an 18% year-over-year decline in Q2 net profit, the company’s shares fell more than 7% to an intraday low of Rs 657.25. For the current fiscal year’s quarter that ended in September, Novelis recorded a net income of $128 million.
Due to lower operational performance, increased restructuring and impairment costs, and production disruptions at its Sierre factory, Novelis was forced to pay $61 million in charges.
In the same quarter last year, the US-based corporation reported a net income of $157 million. For the second quarter of the current fiscal year, Hindalco has not yet released its quarterly earnings.
The first-quarter performance of Hindalco Industries
Comparing Q1 FY25 to Q1 of last year, Hindalco Industries reported a consolidated net profit of Rs 3,074 crore, a 25% year-over-year increase from Rs 2,454 crore. Compared to Rs 52,991 crore in Q1 FY25, the operating revenue for the quarter ending June 30, 2024, was Rs 57,013 crore, a 7.6% year-over-year increase.
Hindalco Industries through the lens of JM Financial
Due to narrowing scrap spreads brought on by Chinese import restrictions, the business will review its “Near Term” EBITDA/t guidance. Pricing agreements and cost reductions might result in an EBITDA per ton of $1000 for Hindalco’s Bay Minette project. With a projected commissioning date of H2CY26 and an unaltered cost of $4.1 billion, its Bay Minette project is on schedule.
“Hindalco is still our top pick in the metal market because of its 70%+ steady/strong EBITDA that is not linked to LME. In a research study, JM Financial Services stated, “We anticipate the release of Hindalco’s consolidated financial statements soon. With a revised target price of Rs 760, the brokerage kept its “Buy” recommendation on the stock. Previously, Rs 730 was the target price.
Nifty 50 vs. Hindalco Industries
The last five trading sessions have seen a 3.9% decline in Hindalco’s shares. In the past month, the stock has dropped 11%. But during the last six months, the stock has increased by 5.3%. The scrip has yielded returns of 7% so far this year and 35% in the past year.
In contrast, over the past five trading sessions, the benchmark index, the Nifty 50, has increased by 0.6%. But over the last month, the benchmark index has dropped 2.3%. But during the last six months, the index has produced an 8.6% return. It has increased by 25% in the last year and 11.4% so far this year.
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