Hindalco hits 17-month high on robust Novelis Q1 earnings

The stock rallied 6% to Rs 152 in intra-day trade, its highest level since March 5, 2015 on the BSE.

Hindalco Industries has rallied 6% to Rs 152 on the BSE in intra-day trade after its US-subsidiary Novelis reported robust earnings for the quarter ended June 30, 2016 (Q1FY17). The stock is currently trading at its highest level since March 5, 2015.

Novelis, the world leader in aluminum rolling and recycling, on Friday reported net income of $24 million for the first quarter of fiscal year 2017, compared to a net loss of $60 million in the prior year period.

Excluding tax-effected special items, the company reported net income of $33 million in the first quarter of fiscal 2017, up from $24 million reported in the first quarter of fiscal 2016.

“Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) for the first quarter of fiscal 2017 increased to $255 million from $127 million reported in the prior year period primarily as a result of a significant reduction in negative metal price lag and operational improvements,” Novelis said in a press release. LINK

Analyst at Motilal Oswal Securities was expected Novelis to report adjusted EBITDA of $259 for the quarter, on an increase in the share of high margin auto products.

Hindalco is schedule to meet on Friday, the August 12, 2016, to consider the unaudited financial results of the company, for the first quarter ended June 30, 2016.

Hindalco’s consolidated EBITDA is estimated to increase 18% YoY to Rs 2,700 crore, led by Novelis and strong margins in primary aluminum, partly offset by maintenance related shutdown in copper, analysts said in a Q1 results preview.

At 10:40 am, the stock was up 4% at Rs 150 on the BSE, as compared to 0.27% rise in the S&P BSE Sensex. A combined 10.42 million shares changed hands on the counter on the BSE and NSE so far.