Hindalco Industries reported 30% jump in a net profit for the fiscal first quarter at Rs 4, 004 crore as compared to Rs 3, 074 crore at the end of Q1FY25, beating Bloomberg estimates of Rs 3, 806 crore. The aluminium and copper major’s revenue from operations jumped to Rs 64, 232 crore in the June quarter, up 12.7% annually from Rs 57, 013 crore in the same quarter last year.
The company’s revenue from operations was also ahead of street estimates of Rs 59, 807 crore.Earnings before interest, taxation, depreciation, and amortisation (EBITDA) for the quarter was Rs 8, 673 crore, ahead of Bloomberg estimates of Rs 7, 836 crore, and up 9% from Q1FY25’s Rs 7, 992 crore benefitting from lower input coal costs in the quarter.
The company’s leadership attributed its financial performance to it’s integrated business model which includes downstream and upstream functions. India business PAT was Rs 2, 847 crore showing a jump of 45% annually, the company said in its earnings presentation. Revenues at Rs 24, 905 crore were up 9% annually, while EBITDA at Rs 4, 982 crore was up 13%. “After the record profitability of FY25, Hindalco sustained its growth momentum with a strong first quarter performance, driven by operational efficiencies, cost control, and an enhanced product mix,” Satish Pai, managing director at Hindalco said.
Novelis Faces Headwinds but Eyes a Comeback
The company’s US subsidiary, Novelis, reported revenue of $4.72 billion, up from $4.19 billion in the same quarter last year, driven by higher average aluminium prices. Business segment EBITDA for the subsidiary was down 17% at $416 million also affected by higher aluminium scrap prices and net negative impact of tariffs. “Novelis’ cost reduction measures targeting run-rate savings of over $75 million in FY26 are now expected to result in a higher FY26 run-rate savings of over $100 million, while maintaining the $300 million target for FY28,” Hindalco said in its earnings release. EBITDA per tonne at Novelis continued to be under $500 for a consecutive fourth quarter at $432, down 18% annually.
Novelis net income attributable to common shareholders was down 36% annually at $96 million primarily driven by restructuring charges and lower operating performance, partially offset by favourable metal price lag. Shipments for the fiscal first quarter were up 1% annually at 963 kilotonne (KT). The absence of a US-Canada trade in light of increasing tariff impositions by US had an impact on the margins.
Aluminium upstream financials
The management expects pick up in Novelis business from Q3 onwards as steps operational interventions being undertaken kick in. Hindalco’s aluminium upstream segment reported a revenue of Rs 9, 331 crore, up 6% annually from Rs 8, 839 crore in the same period last year. Meanwhile, aluminium downstream reported revenue of Rs 3, 353 crore up 17% from `2, 868 crore in the first quarter of FY25. The copper segment posted revenue of Rs 14, 886 crore versus Rs 13, 292 crore in the same quarter previous year.
Aluminium upstream EBITDA was Rs 4, 080 crore, up 17% annually, while downstream aluminium EBITDA at Rs 229 crore was up 108% year on year. Copper business EBITDA was down 16% at Rs 673 crore affected by a drop in treatment and refining charges.
Upstream aluminium shipments were down 1% on an annual basis at 325 KT against 329 KT in Q1FY26. Downstream aluminium shipments at 101 KT were up 6% year on year while copper shipments at 124 KT were up 4%.
Hindalco has earmarked Rs 7, 500 crore to Rs 8, 000 crore capex for FY26 with investments being focussed on multiple projects. As these projects scale up, FY27 capex is expected to be Rs 14, 000 crore to Rs 15, 000 crore Pai said.
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