Hindalco Shares Rise After Novelis' Upbeat April-June Guidance
Shares of Hindalco Industries Ltd. rose 4.9% after its U.S. subsidiary Novelis said it plans to raise $1,500 million to refinance higher-cost bonds and came out with better-than-expected earnings estimates.
Novelis Inc.’s wholly owned subsidiary Novelis Corp. priced an offering for $750-million senior notes due in 2026 at 3.250%, and another $750 million senior notes due in 2031 at 3.875%, according to its filings.
The company intends to use the net proceeds of the offering, together with cash on hand, to redeem outstanding 5.875% senior notes due in 2026.
Shares of Hindalco rose 5.05%, the most since May 11, after the report compared with a 0.6% fall in benchmark Nifty 50. The rally in the stock was aided by an upbeat earnings commentary by Novelis.
According to its advanced estimate filings:
Novelis expects adjusted Ebitda for the June quarter at $550-560 million.
It estimates shipments at 973 kilotonnes, implying Ebitda per tonne of $565-585.
Free cash flow from continuing operations at a negative $35-25 million.
Aleris Duffel update: Receivables of 115-million euros marked down to 45-million euros. Post-arbitrating proceedings still on.
Novelis’ estimates significantly better compared with earlier forecasts.
A receivable mark-down on Duffel divestment a minor let-down.
Sales at $3.85 billion compared to Edelweiss’ estimate of $3.74 billion.
Shipments of 973 kt against the brokerage’s estimate of 934kt.
Remains “constructive” on Hindalco
Increment refinancing bodes well for Novelis.
Higher Ebitda/tonne range allays short-term concerns on auto-linked volume growth.