Hindalco Shares Rise Despite Novelis’ Weak Q3 Update

Hindalco Industries saw a 2% uptick in share price, reaching Rs 597 in morning trade on January 9, following the release of a business update by its wholly-owned subsidiary, Novelis, for Q3 FY25. Despite challenges, investor sentiment remained positive, reflecting optimism about the company's prospects.

Novelis' Q3 Performance

Novelis is, a global leader in aluminium rolling and recycling, reported an expected adjusted EBITDA of $360–$370 million, a drop from $454 million in the same period last year. Shipment volumes are projected at 900,000–910,000 tonnes, which is steady compared to the previous year.

However, EBITDA per tonne is anticipated to decline to $400–$407, a decrease from $499 per tonne last year due to higher scrap costs and an unfavourable product mix.

Future Outlook

Despite the weaker third-quarter performance, Novelis management expressed confidence in recovery during Q4 FY25. They forecast an EBITDA per tonne rebound to $480–$490, aligning with Q2 levels.

Market Reaction

As of 9:50 am, Hindalco shares were trading at Rs 592, reflecting a 1% gain from the previous close. Over the past three months, however, Hindalco's stock has declined by nearly 19%, weighed down by concerns around Novelis' performance.

Key Developments at Novelis

In addition to the Q3 update, Novelis reported an 18% year-on-year decline in net income for the July-September quarter, attributed to higher restructuring costs, production interruptions at its Sierre plant, and lower operating margins.

While short-term headwinds remain, optimism surrounding Hindalco's domestic resilience and Novelis' recovery potential is sustaining investor interest.