Hindalco shares gained owing to strong performance by the company's US-based unit Novelis Inc. The stock jumped as much as 4 per cent to Rs 248.35, its highest since April 23. Hindalco stock was on track to gain for third straight session.

Novelis Inc had on Tuesday reported a 9 per cent jump in quarterly adjusted EBITDA to $319 million compared with $292 million in the previous year.

Net sales increased 17 per cent over the previous year to $3.1 billion for the fourth quarter of fiscal 2018, driven by higher average aluminium prices, higher total shipments, and a favourable impact from record automotive shipments. Net sales grew 20 per cent to $11.5 billion in fiscal 2018.

HSBC says due to costs having been passed through, low exposure to Rusal metal (3 per cent) and 57 per cent recycled content, Novelis did not see any strong impact from the recent price volatility.

HSBC has maintained positive outlook for Novelis' business, citing its leadership position in beverage cans and rising share of automotive sheets.

Macquarie says Novelis' Q4 addressed margins concerns, adding higher physical premiums and China's tariff on US scrap have a positive impact on scrap spreads and margins for the company.

Macquarie has kept 'outperform' on Hindalco and added that the stock offers the most attractive risk-reward in the metals space. It has maintained 'buy' with a price target of 305. The stock has fallen nearly 13 per cent this year up to Tuesday's close.

(With inputs from Reuters)

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