Hindalco's first-quarter earnings will be in focus on Friday. The stock has hit a 52-week low just a few trading sessions ago. Novelis’ numbers were very good but the street ignored that. Close to 60 percent of their EBITDA now comes in from Novelis.
In terms of the domestic business, the topline growth of around 2-2.5 percent is seen. Base metal prices have been under immense pressure particularly aluminium, which is down nearly around 20 percent on a year on year. Even on a sequential basis, there has been pressure on base metal prices.
Topline is going to be impacted by a few factors, including lower base metal prices and higher sales volumes in both segments.
Aluminium sales volumes should be at around 310,000 odd. 310,000-315,000 is what the street is working with. Even for copper, the analysts are expecting around 86,000 tonnes for the past quarter.
There will be a sharp compression in terms of operating profits. It should collapse by close to around 25-29 percent odd and the margins as well will get compressed to around 8.7 percent. So there will be margin pressure in both the segments, copper as well as aluminium.