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Motilal Oswal Report
Hindalco Industries Ltd.’s global peers Constellium SE, Norsk Hydro, and Crown Holdings reported their Q2 CY20 results recently. A read-through of these indicated a positive outlook for near-term volumes and margins at Novelis Inc. (Hindalco’s overseas business).
In Q2 CY20, volumes declined by approximately 10% YoY in Beverage Can (weakness in Latin America and Europe), approximately 55% YoY in Automotive, and approximately 40% in Aerospace.
However, demand is improving, with volumes in Q3 CY20 guided to be much better. The Beverage Can market remained strong in North America, with volume growth even in Q2 CY20.
Conversely, the European Can market witnessed decline due to weakness in Southern Europe. South America also witnessed decline due to lockdown in April; however, demand rebounded sharply mid-May onward.
Constellium informed that its capacity utilization in Automotive has now reached 80% on account of improving demand, although the outlook remains uncertain.
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