Hindalco Industries shares dropped over 4 per cent to an intraday low of Rs 131.75 on Wednesday after its subsidiary, Novelis, which contributes around 50 per cent to Hindalco's gross profit reported disappointing earnings for the January-March quarter.
Novelis, which is a global leader in aluminium rolled products and the world's largest recycler of aluminium reported nearly 50 per cent drop in its net profit at $29 million compared to $54 million in the corresponding quarter of previous fiscal.
Its EBITDA or gross profit came in at $ 222 million compared to $250 million in the previous fiscal. Analysts say lower volumes led to lower operating profit for the company. Europe accounted for 75 per cent of the decline in its operating profit, analysts say.
Net sales of the company came in at $2789 million against $2549 million year-on-year.
Poor performance of its subsidiary is likely to have weighed on the Q4 earnings of Hindalco which is yet to be announced, believe analysts.
Shares in Hindalco Industries closed 2.98 per cent lower at Rs 133.50 apiece, underperforming the broader Nifty, which ended 1.36 per cent higher.
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