Hindalco shares fall 7% as bad news from Paris makes it top Nifty loser

ETMarkets.comLast Updated: Oct 24, 2024, 10:44:00 AM IST

Synopsis

Hindalco Industries' shares dropped 7% to Rs 666.80 on BSE after Constellium's weak Q3 revenue report. Constellium experienced reduced demand in automotive and industrial markets, impacting Hindalco's subsidiary Novellis, which contributes significantly to the company's volumes and EBITDA.

Shares of Hindalco Industries on Thursday fell up to 7% to day's low of Rs 666.80 on BSE to become the top loser in Nifty this morning after Paris-based aluminum products maker Constellium reported weak quarterly numbers.

Constellium's earnings report card, which showed its Q3 revenue falling 5% year-on-year (YoY), has weak takeaways for Hindalco.

During the quarter, Constellium saw softening demand in automotive markets in North America and Europe, as well as sharp declines in most industrial markets in North America and further weakness in industrial and specialty markets in Europe.

"Our team faced significant challenges in the third quarter, including increased demand weakness across several of our end markets, and the ongoing impact from the flood that occurred back in late June at our facilities in the Valais region in Switzerland," said CEO Jean-Marc Germain.

Demand outlook weakness in the automobile segment is a negative for Hindalco's subsidiary Novellis, which commands a 20% share of Hindalco's volumes and a higher proportion of the company's EBITDA, CNBC TV-18 reported.

In the June quarter, Hindalco had reported a consolidated net profit of Rs 3,074 crore for the quarter ended June 30, 2024, a 25% jump from Rs 2,454 crore reported by the company in the year ago period.

The revenue from operations for the reporting quarter stood at Rs 57,013 crore, which was up by 7.6% from Rs 52,991 crore reported in the corresponding quarter of the previous financial year.

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