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NEW DELHI: A likely one-time hit on Novelis’ operational performance did not sit well with shareholders of Hindalco, who sold the stock amid broader market weakness on Thursday, driving it lower for the third day.

Hindalco’s subsidiary Novelis said its adjusted EBITDA for the March 2022 quarter slid 15 per cent year-on-year (YoY) to $431 million. This included $55 million in higher operational costs, primarily in North America, as a result of production and logistics challenges, which the company said are not expected to continue in FY2023.

“The current year quarter also included a $15 million non-recurring regulatory provision. Other higher inflationary cost pressures were largely offset by favourable product pricing,” it said.

Outlook commentary suggested that Q1FY23 adjusted EBITDA will return to $500 million-plus as one-time operational cost incidence is behind the company, brokerage ICICI Securities said while maintaining a buy call on Hindalco.

Shares of Hindalco settled the day at Rs 406.7, down nearly 4 per cent.

Pre-earning jitters

Tata Motors emerged among the top Nifty losers on Thursday, cracking 4 per cent ahead of its Q4 show, with pressure likely to continue in the next session as the home-grown auto major missed earnings estimates.

While Tata Group firm’s net loss narrowed to Rs 1,033 crore during the quarter, it missed ET NOW poll of Rs 415 crore profit in Q4. Even revenue and margin performance were below what Street was pencilling in.

The company said that the supply situation is gradually improving, but it expects commodity inflation to remain at an elevated level. Despite the challenges, it reiterated its goal to near net auto debt-free by FY2024.

The stock closed at Rs 371.9 on NSE today.

Bounce on bonus issue

State-run Indian Oil Corporation snapped its three-day losing run as its shares bounced back following a bonus share issue announcement.

The stock defied market selloff to eke out 2 per cent gains after the company said its board would meet on May 17, 2022, to mull the issue of bonus shares.

Apart from this, the board will also consider and approve the financial results of the company for the quarter and year ended March 31, and the declaration of final dividend, if any.


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