Hindalco prospects brighten on Novelis' strong show

Improving profitability, higher cash flows and debt reduction at US subsidiary to drive performance

Sustained improvement in profitability and rising free cash flows for Novelis, Hindalco’s US subsidiary, are a big positive. The trend continued in the March 2017 quarter (Q4) lifting investor sentiment. The Hindalco stock gained more than four per cent intra-day before closing at Rs 193.40.
 

Novelis reported one of its best Ebitda (earnings before interest, tax, depreciation and amortisation) figures at $292 million, which was ahead of most analysts’ estimates. Ebitda was five per cent higher than Q4 in FY16 and 15 per cent higher sequentially, led by a better product mix and cost savings. A better profitability indicator, Ebitda