Hindalco Falls On Large U.S. Client’s Curbed Growth Outlook, Falling Aluminum Price

Shares of Hindalco Industries Ltd. fell the most in nearly a month after one of its largest U.S. clients slashed its own growth outlook amid falling aluminium prices and historic inflation.

That led Jefferies to maintain “hold” on the company.

The U.S.-based Ball Corp., a beverage can maker and Hindalco subsidiary Novelis Inc.’s largest customer, has lowered its five-year volume growth outlook by 1-2%, citing historic inflation. The near-term volumes could be even lower given macro pressures, it said.

To be sure, Ball is Novelis’ single largest client and Novelis in turn makes up about 60% of Hindalco’s ebitda.

“While Ball remains confident on long-term growth outlook, it sees global growth coming at or below the low end of its 4-6% target in 2023,” Jefferies said in a note dated Sept. 26. “Near-term, it also lowered its second half of 2022 outlook, noting it’s seeing higher inflation,” the note stated.

The aluminium prices were also affected by the clouded demand outlook for global metal with continued lockdowns in China and tightening interest rates elsewhere, the note said.