Shares of Hindalco Industries, a flagship company of Aditya Birla Group, fell nearly 3% in opening deals on Thursday even after its U.S. subsidiary, Novelis, reported strong earnings in the March quarter of 2022. The drop in share price was in line with the sharp fall in benchmark Indices, with the Sensex and Nifty tumbling 1.8% in early trade.
Hindalco shares opened lower for the fourth consecutive session at ₹418.90 on the BSE, against the previous closing price of ₹422.90. Extending opening losses, the stock dropped as much as 2.96% to touch a low of ₹409.50. In the first hour of trade so far, 0.92 lakh shares worth ₹3.82 crore changed hands over the counter on the BSE, while market capitalisation dropped to ₹92,246.4 crore. In comparision, the BSE Sensex was trading 990 points, or 1.83%, lower at 53,097 levels.
The largecap stock has been falling for the last 3 trading days and has lost 7.41% in this period. The share price of aluminium major has declined nearly 10% in a week, 25% in the past month, and 15% since the beginning of the calendar year 2022. On a year-on-year basis, the stock has given muted returns of 2% to its shareholders as compared to 9% growth in BSE Sensex.
Hindalco Industries in an exchange filing on Wednesday said that its subsidiary Novelis Inc has posted a 21% year-on-year (YoY) growth in net income at $217 million in the fourth quarter ended March 2022, driven by strong sales and lower tax cost. Net sales increased 34% to $4.8 billion in Q4 FY22. However, adjusted EBITDA fell 15% YoY to $431 million due to higher operational costs, primarily in North America, as a result of production and logistics challenges. The company said that other higher inflationary cost pressures were largely offset by favorable product pricing.
For the full financial year 2022, Novelis’ net income from continuing operations excluding special items stood at $934 million, up 66% YoY. Net sales increased 40% to $17.1 billion in the fiscal year 2022, compared to $12.3 billion in the fiscal year 2021, driven by higher average aluminum prices and record shipments in every product end market. Novelis ended the fiscal year 2022 with strong total liquidity of $2.6 billion as of March 31, 2022.
In a separate development, Novelis announced an investment of $2.5 billion to build a new low-carbon recycling and rolling plant in Bay Minette, Alabama, United States. The highly advanced facility will have an initial 600 kilotonnes of finished aluminum goods capacity per year. More than half of the capacity of the new facility will be used to serve the growing demand for aluminum beverage can sheet in North America, which is driven by consumer preference for more sustainable packaging.
The board of Hindalco Industries is set to meet on May 26 to release the company’s financial results for the quarter and year ended March 31, 2022.