Hindalco Industries , a leading aluminum and copper producer, reported mixed results for the first quarter, with strong performance in its India operations offsetting challenges faced by its subsidiary Novelis.

India Operations Show Robust Growth

Hindalco's India business delivered a strong performance in Q1, with EBITDA rising 13% year-on-year to ₹4,982.00 crores. The net profit for the India operations surged by an impressive 45% to ₹2,847.00 crores, underscoring the resilience of the company's integrated business model.

The Indian aluminum upstream segment was a standout performer, with EBITDA growing 17% year-on-year to ₹4,080.00 crores. The segment achieved an EBITDA margin of 44%, maintaining its position as the best in the global industry. The cost of production in Q1 was the lowest for the company in the last 15 quarters, driven by lower input costs and increased linkage coal availability.

Record Performance in Downstream Aluminum

Hindalco's Indian downstream aluminum business set new records in Q1. The segment achieved its highest-ever quarterly EBITDA of ₹229.00 crores, a remarkable 108% increase year-on-year. Shipments rose 6% to 101 Kt, while EBITDA per ton reached a record $264, up 92% from the previous year. This stellar performance was attributed to higher value additions from innovations like battery enclosures and premiumization efforts.

Copper Business Faces Challenges

The copper segment experienced some headwinds, with EBITDA declining 16% year-on-year to ₹673.00 crores. This was primarily due to lower Treatment and Refining Charges (TC/RCs), partially offset by better realizations in byproducts and operational efficiencies. Despite these challenges, Hindalco maintains its guidance of ₹600.00 crores quarterly EBITDA for the copper business.

Novelis Navigates Tariff Impacts and Scrap Prices

Novelis, Hindalco's US-based subsidiary, faced challenges in Q1 with EBITDA declining 17% to $416.00 million. The decrease was attributed to elevated scrap prices and the impact of tariffs. However, shipments increased by 1% to 963 Kt, indicating resilient demand.

To mitigate these challenges, Novelis is implementing a three-year $300.00 million structural cost reduction program. The company has raised its exit savings target to over $100.00 million, up from the earlier estimate of $75.00 million.

Strategic Initiatives and Outlook

Hindalco announced the acquisition of US-based AluChem for an enterprise value of $125.00 million, aimed at strengthening its global specialty alumina portfolio. This move aligns with the company's strategy to expand its specialty alumina capacity from 500,000 tons to 1 million tons over the next 3-4 years.

The company is progressing well on its key expansion projects, including the Aditya Alumina Refinery, Aditya aluminum smelter, and copper smelter. Hindalco has also begun commissioning the Aditya FRP facility and a copper tube plant with inner group tube capabilities.

Satish Pai, Managing Director of Hindalco Industries, commented on the results: "Our disciplined capital allocation, superior execution, and focus on high-value segments will drive sustainable growth regardless of near-term market volatility. Hindalco isn't just prepared for the future, but is advancing into its next phase with scale, purpose, and confidence."

Financial Position

Hindalco maintains a strong balance sheet with consolidated net debt-to-EBITDA at 1.02x as of June. The India operations have a net cash position of ₹18,657.00 crores, while Novelis carries a net debt of ₹46,923.00 crores.

As Hindalco navigates through market challenges and capitalizes on growth opportunities, investors will be closely watching the company's performance in the coming quarters, particularly the expected improvements in Novelis' operations in the second half of the fiscal year.

Hindalco Industries , a leading aluminium and copper manufacturing company, has reported a robust financial performance for the latest quarter, with its Managing Director, Satish Pai, expressing optimism for continued strong results through FY26.

Financial Highlights

Strong Performance in Aluminium Segment

The company's aluminium upstream business showcased exceptional performance, achieving an Ebitda of nearly $1,500.00 per tonne. This marks one of the strongest performances for the segment in the past 15 quarters, highlighting Hindalco's operational efficiency and market positioning.

Outlook and Strategy

Satish Pai, Managing Director of Hindalco Industries, expressed confidence in the company's ability to maintain this strong quarterly performance for the remainder of FY26. However, he noted that this outlook is contingent on London Metal Exchange (LME) aluminium prices staying within the range of $2,400.00-$2,600.00 per tonne.

Integrated Business Model and Novelis Recovery

Pai emphasized the strength of Hindalco's integrated business model, which has contributed to its resilience in challenging market conditions. He also noted that the company's US subsidiary, Novelis, is expected to show significant recovery in the second half of the fiscal year.

Upcoming Projects

Hindalco is poised for further growth with two new projects scheduled for commissioning in the July-September quarter:

1. Aditya FRP: Expected to add 70,000 tonnes of rolled products
2. Copper IGT: Projected to contribute 15,000 tonnes of copper tubes

These expansions are anticipated to bolster the company's production capabilities and market presence.

Market Response

Investors responded positively to Hindalco's performance and outlook, with the company's shares closing 5.09% higher at Rs 701.60 on the day of the announcement.

Copper Business Resilience

Despite challenging market conditions, Hindalco's copper business demonstrated resilience, contributing Rs 673.00 crore to the overall Ebitda. This performance underscores the company's ability to navigate market fluctuations effectively.

Hindalco Industries' strong quarterly results and positive outlook reflect its robust operational strategies and market positioning. As the company moves forward with new projects and anticipates recovery in its US operations, it remains well-positioned to capitalize on favorable market conditions, provided metal prices remain stable within the projected range.