Hindalco Share Price in Focus; Novelis Net Income Slips 9% in Q3 FY25 to $110 Million

Novelis Inc., a subsidiary of Hindalco Industries Limited, reported its financial results for Q3 FY25, ending December 31, 2024.

Post the announcement, on February 11, 2025, Hindalco share price (NSE: HINDALCO) opened at ₹594.05, down from its previous close of ₹596.00. At 11:08 AM, the share price of Hindalco was trading at ₹601.20, up by 0.87% on the NSE.

Novelis Q3 FY 2025 Financial Highlights

Net income attributable to its common shareholder stood at $110 million, marking a 9% YoY decline. Excluding special items, net income was $119 million, a sharp 32% YoY decrease. Adjusted EBITDA also saw a significant dip of 19% YoY, amounting to $367 million. The Adjusted EBITDA per tonne shipped fell by the same margin, standing at $406. These declines were driven primarily by elevated aluminium scrap prices and an unfavourable product mix.

Net sales rose by 4% YoY to $4.1 billion, supported by higher average aluminium prices. However, rolled product shipments were largely flat, down by just 1% YoY at 904 kilotonnes. Strong demand for beverage packaging sheets offset reduced shipments in the automotive and speciality segments.

Cash Flow and Strategic Investments

Operating cash flow for the first nine months of FY25 totalled $263 million, a considerable drop from $420 million in the prior-year period, mainly due to lower net income and unfavourable changes in working capital.

The company reported an adjusted free cash outflow of $915 million during this period, higher than the $517 million outflow in the previous year. The increase was attributed to elevated capital expenditures and reduced cash flow from operations.

Capital expenditures surged by 22% YoY to $1.2 billion in the nine-month period, with investments focused on expanding rolling and recycling capacity. Key projects include the Bay Minette facility in the U.S., which forms part of Novelis’ strategic growth initiatives.

As of December 31, 2024, Novelis maintained a strong liquidity position of $1.6 billion, comprising $791 million in cash and equivalents and $790 million in availability under committed credit facilities. In January 2025, Novelis issued $750 million in senior unsecured notes due 2030, with the proceeds directed toward repaying borrowings under its ABL revolver.

The company’s net leverage ratio stood at 2.9x, reflecting the ongoing investments and operational challenges.

President and CEO of Novelis Inc., Steve Fisher, said, “With a leading industry average of 63% recycled content in our products in our last fiscal year, Novelis has been a pioneer in using recycled inputs to drive down carbon emissions. As others have begun to follow suit, competition for scrap aluminium has intensified and is creating significant pressure on scrap pricing, which is impacting our financial results.”

He further stated, “We believe we are well-positioned to face these challenges and have operational and cost-efficiency initiatives underway to offset some of the pressures. At the same time, we are also developing new technologies that will allow us to expand the types of scrap inputs we can purchase for use in our system.”

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