Nifty50 Top Gainer: Here’s Why Hindalco is Up 3%, CLSA Sees Over 24% Upside

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Nifty50 Top Gainer: Here’s Why Hindalco is Up 3%, CLSA Sees Over 24% Upside
Credit: © Reuters.

By Malvika Gurung -- Shares of the mining company Hindalco (NS: HALC ) surged 2.55% to Rs 424.8 apiece at 12:16 pm, after surging almost 4% in early trade on Thursday, following a stellar June quarterly earnings of its wholly owned aluminium subsidiary Novelis Inc.

Novelis is the world’s largest aluminium recycler and leading producer of rolled aluminium products.

The company delivered record financial performance in the June-ending quarter, following a record performance in the previous fiscal, and posted its best-ever profitability.

Its adjusted EBITDA climbed 1% YoY to a record $561 million in the June quarter, aided by increased product pricing, comprising some higher costs passed on to customers, along with a favourable product mix and lower metal costs.

Novelis has maintained volume guidance of 3% and expects a stable demand for sustainable aluminium solutions across end markets.

Its net income attributable to common shareholders surged 28% YoY to a record $307 million, while net income from continuing operations climbed 18% YoY on higher underlying Adjusted EBITDA, a lower tax provision in the ongoing year and unrealized derivative gains, stated a Yahoo Finance report.

Hindalco’s subsidiary company’s net sales jumped 32% YoY to $5.1 billion in Q1, led by increased prices of aluminium and local market premiums.

Global brokerage CLSA maintains its Buy call on Hindalco with a target price at Rs 525/share, an upside of 24.4% compared to its current price on Novelis’ strong Q1 results and robust guidance, while EBITDA was above estimates.

Benchmark equity indices Nifty50 and Sensex traded in red, while Hindalco was the top gainer in the Nifty50 index.

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