Hindalco Industries gains 3% on plans for land sale worth Rs 595 crore

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July 13, 2023
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Hindalco Industries is down nearly 8 percent in the year so far, sharply underperforming the Nifty 50’s near 7.5 percent rise during the same tenure.

Shares of Hindalco Industries rose around 3 percent in early trade on July 13, after the company approved plans for a land sale.

In a board meeting held on July 12, the company approved a proposal for the sale of land situated at Kalwa, Maharashtra. The land will be sold to Birla Estates Pvt Ltd, a subsidiary of Century Textiles for a total sum of Rs 595 crore, which is to be received in multiple tranches over a period of time.

The land sale is likely to be completed within the next 15 months.

At 10.50 am, shares of Hindalco Industries were trading at Rs 437.40 on the National Stock Exchange, up 2.9 percent from the previous close. Trading volumes were also high as 44 lakh shares changed hands on the exchanges higher than the volumes of 29 lakh shares in the previous session.

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With the onset of the Q1 earnings season, investors await the company’s quarterly numbers. Most brokerages rolled out a weak earnings outlook for Hindalco on the back of a decline in LME Aluminum prices, which is also expected to weigh down on its operating margins.

Moreover, the company’s copper sales in the April-June quarter were also impacted by the smelter shutdown from early April to mid-June, brokerage firm Axis Securities highlighted.

“Revenue to decline for Hindalco on a year-on-year as well as sequential basis dragged by lower LME Aluminum prices, Novelis shipments and lower Copper sales,” Axis Securities stated in its report.

Kotak Institutional Equities also pegged Hindalco’s EBITDA (Earnings before interest, taxes, depreciation, and amortization) for its India business at Rs 2,160 crore, representing a 40 percent on-year decline and a 10 percent sequential fall.

A weak growth outlook for the company has also weighed on its share performance in 2023. The stock is down nearly 8 percent in the year so far, sharply underperforming the Nifty 50’s near 7.5 percent rise during the same tenure.

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