Explained: Why Hindalco share price fell over 6% today

At 10:25 am, Hindalco's share price was down 6.50%, trading at Rs 662.20.

In Short

• Hindalco shares fall 6% after Novelis reports declining net income
• Novelis posts 18% drop in net income for September quarter
• Emkay sets Hindalco price target of Rs 600, 15% downside

Hindalco's shares dropped more than 6% in early trading today after its US-based subsidiary, Novelis Inc., reported a decline in net income for the July-September quarter. At 10:25 am, the stock was down 6.50%, trading at Rs 662.20.

Novelis, a major aluminium producer, posted an 18% fall in net income, which dropped to $128 million for the September quarter of 2024-25. The decline was attributed to a $61 million charge from production disruptions at its Sierre plant, alongside increased restructuring costs and lower operational performance.

Despite a 4.5% rise in net sales to $4.295 billion from $4.107 billion a year earlier, the company’s earnings were impacted by higher aluminium scrap prices, an unfavourable product mix, and the flooding at the Sierre plant. The EBITDA per tonne stood at $489, with adjusted EBITDA at $462 million.

Following the weak results, domestic brokerage Emkay Global downgraded Hindalco to a ‘sell’ from ‘reduce’, citing concerns over Novelis’ disappointing outlook.

Emkay Global expressed doubts about Novelis' EBITDA per tonne improvement in the medium term, especially as the company withdrew its EBITDA guidance amid tighter scrap spreads and China's liberalisation of scrap imports.

The brokerage set a target price of Rs 600 per Hindalco share, implying a 15% downside from the previous session's close.

Over the past year, Hindalco's stock has gained about 37%, outperforming the Nifty 50 index, which rose by 26%.