Hindalco Share price: Novelis Q1 results sees earnings decline : Should you Buy Sell, or Hold the stock?

Stock Market Today: Hindalco Industries share price remains in focus post Q1 performance reported by its US subsidiary Novelis Inc. The Net profit for Novelis at $151 million declined 3% YoY, The same was impacted by Heavy flooding in Sierre and Valais regions in Switzerland, which affected operations at Novelis’s Sierre plant. The current year thereby includes $40 million in initial charges from Sierre flooding in June.

The operating performance nevertheless remained good and adjusted Ebitda grew 19% YoY to $500 million while adjusted Ebitda per tonne grew 10% to $525. Ebitda stands for Earnings before Interest Tax Depreciation and amortisation. Novelis net Sales increased 2% YoY to $4.2 billion . Its Total FRP shipments of 951kt (951,000 tonne) were up 8% year-on-year.

Guidance Maintained- While the net profit declined however the operating performance remains healthy. The management reiterated its near-term EBITDA/t target of $ 525 to be supported by capacity expansion, favorable pricing, Higher recycle content, and operating leverage. In the long run, Ebitda per ton is expected to reach $600 a ton with the commissioning of the recycling projects and new capacities, said analysts at Motilal Oswal Financial Services. Motilal Oswal has a buy Ratings on Hindalco Industries share price.

Jefferies expects more than 30% upside

Jefferies India target price for Hindalco Industries share price currently stands at ₹825 indicates more than 30% upside for the stock.

Post Q1 results by Novelis , Jefferies analysts said that Novelis' Q1 Ebitda rose 19% yoy but was 5% below Jefferies estimates. Volumes grew 8% YoY but Ebitda per ton fell a slight 3% sequentially to $525 (up 10% YoY).

Novelis expects another $30 million impact on adjusted Ebitda in Q2 due to flooding in its Swiss plant. It, however, maintained its mid-term Ebitda per tonne guidance of $525.

Hindalco Industries will declare its domestic and consolidated performance on 13 August'2024 and analysts will review overall ratings thereafter.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions