The stock of Hindalco Industries was in the spotlight on Friday, October 18, following encouraging results from Crown Holdings, a key customer of its subsidiary Novelis.

Crown Holdings, a global leader in packaging, reported a 5% growth in global beverage can shipments during the past quarter, with strong performance in key markets such as Brazil, Mexico, Europe, and the USA. This robust growth bodes well for Novelis, which is Hindalco’s aluminium flat-rolled products subsidiary and a major supplier of aluminium for beverage cans.

The positive read-through from Crown Holdings’ earnings comes at a crucial time for Novelis as its second-quarter results could be impacted by recent floods in Switzerland, with management guiding a potential net hit of around $30 million.

However, signs of recovery are already emerging. In particular, the market for used beverage cans (UBCs) has seen a 20% recovery in scrap spreads over the last two months, pushing prices to approximately $800 per tonne. This recovery is expected to improve Novelis’ EBITDA per tonne, with forecasts indicating a rebound from $500 per tonne in Q2 to $525 in Q3 and $550 in Q4.

These optimistic signals from Crown Holdings’ growth and the improving scrap spreads are setting up Novelis for a more robust performance in the year’s second half. Market participants hope this recovery will bolster the company’s bottom line and drive further growth.

Hindalco’s stock responded positively to the news, gaining 2.5% on Friday to close at ₹753.50 per share. The company, headquartered in Mumbai, has a market capitalisation of ₹1,69,327.77 crore and has delivered a 9.21% return over the past three months.