Novelis’ strong showing powers Hindalco surge

The company has guided that its capital expenditure in 2022-23 will be around $1.3-1.6 billion including maintenance capex of $300 million.

Novelis’ strong showing powers Hindalco surge
The company said adjusted operating profit came in at a record high of $561 million as against $555 million a year ago.

Hindalco Industries’ share price surged about 4% in morning trade, and it closed up 1.8% at Rs 421.75 on BSE on Thursday, after the company’s US subsidiary Novelis reported strong set of numbers for the quarter ended June 30.

Novelis’ net profit increased 28% year-on-year to $307 million, while the company’s net sales in the quarter jumped 32% y-o-y to $5.1 billion helped by strong demand in the international market. The company said adjusted operating profit came in at a record high of $561 million as against $555 million a year ago.

Its operating performance also remained firm as adjusted operating profit per tonne surged 33% on a sequential basis to $583, boosted by better pricing and product mix, Jefferies noted in a report. In the year-ago quarter, it was $570.

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Ebitda (earnings before interest, tax, depreciation and amortisation) increased 10% y-o-y to $561 million and was above analyst estimates.

However, the company’s net debt rose marginally on a sequential basis by 2% to $4,519 million versus $4,452 million in March quarter, as rising working capital impacted cash flows, the foreign brokerage said.

Novelis has also increased its margin guidance to $525 from $500 earlier with upbeat on demand across segments, amidst ongoing macroeconomic headwinds for the metal sector.

The company has guided that its capital expenditure in 2022-23 will be around $1.3-1.6 billion including maintenance capex of $300 million.

The holding company Hindalco Industries will declare its results for the June quarter on August 10.

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