Novelis' disappointing Q4 suggests near-term weakness for Hindalco stock

Analysts though are positive on Hindalco, and see an improvement in business prospects from the second half of FY24

Novelis’ results for the January-March quarter of the 2022-23 financial year (Q4FY23) disappointed investors and as a result, the share price of Hindalco (Novelis is a 100 per cent subsidiary of Hindalco) has slid. The non-ferrous metals major is suffering from the impact of a down-cycle in aluminium and copper, as well as the slowdown imposed in Europe by the Russia-Ukraine war. Prospects for the firm look gloomy, at least for the first half (H1) of FY24.

Novelis’ Q4FY23 Ebitda (earnings before interest, tax, depreciation and amortisation) were below estimates on weak volumes (down 5 per cent year-on-year (YoY)), partly