Shares of Hindalco Ltd., the Aditya Birla Group company, are the top losers on the Nifty 50 index on Thursday, November 7, after its unit Novelis, reported its quarterly results late Wednesday night.

The bigger factor that resulted in the fall in share price was the fact that Novelis withdrew its short-term EBITDA per tonne guidance of $525.

Novelis attributed the suspension of guidance to tight scrap spreads due to accelerated scrap purchases by China.

China accelerated its aluminium scrap purchase, which led to a sharp increase in prices after liberating its policies.

For the quarter gone by, Novelis' EBITDA per tonne stood at $498, down from $519 during the same quarter last year and $525 in the June quarter.

Adjusted EBITDA for Novelis was impacted due to a $25 million hit the company had to take due to flooding in Sierre.

Additionally, unfavourable mix from lower automotive shipments, along with less favourable metal benefit from higher scrap prices also impacted the company's EBITDA per tonne. The unfavourable mix from lower automotive shipments was partly offset by higher prices.

The management of Novelis expects headwinds to persist in the current as well as the March quarter due to increasing aluminium scrap prices.

Additionally, the December quarter is seasonally weak as well for Novelis, which can cause volatility in the company's short-term growth.

Net debt at the end of the quarter also increased to $4,760 million from $4,629 million during the June quarter.

Nearly two-thirds (67%) of Hindalco's EBITDA comes from Novelis.

Shares of Hindalco are trading 6.2% lower at ₹664.4. The stock is down 14% from its recent peak of ₹772. The recent fall has trimmed Hindalco's year-to-date gains down to 9%.

Published on November 7, 2024, 9:47:55 AM IST

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