Novelis' strong Q2 performance saves the day for parent Hindalco

Analysts say the demand for aluminium from the US auto industry remains favourable and there are supply constraints for aluminium cans too

Hindalco’s domestic operations reported stable volumes during the July-September quarter (second quarter, or Q2), but its profitability was bound to feel the heat of declining base metal prices.

On a consolidated basis though, the steady showing of its US arm, Novelis, saved the day for Hindalco. Novelis’ operating profit (about two-third of overall) grew by 5.8 per cent and provided some cushion to the consolidated operating profit, which fell by only 9 per cent year-on-year (YoY) in Q2. The trend may continue in the near term.

In the domestic aluminium segment, Hindalco maintained sales volumes, which, at 328,000 tonnes, was