Hindalco Industries Plans Rs 30,000 Crore Capex To Meet Rising Demand

Hindalco Industries Ltd. plans to invest Rs 30,000 crore in capital expenditure over the next three to four years, driven by robust demand and significant capacity additions, Managing Director Satish Pai said on Monday.

Both the aluminium and copper segments are seeing good demand, with the domestic demand at 7–8% compound annual growth rate year-on-year, Pai told NDTV Profit's Sajeet Manghat in an interview. "A year ago, India was consuming about 4 million tonnes of aluminium and in FY24, the run rate is reaching close to 5 million."

In the current financial year, the aluminium producer is planning a capex of Rs 6,000 crore. "It would be fair to say that in the coming few years, we will be doing Rs 6,000–7,000 crore of capex," he said.

On the aluminum side, about 170 kilotonnes of capacity is about to get commissioned in December and on the copper side, about 25 kilotonnes of inner grooved tubes will be coming in, according to the MD. "Over the next few years, we are going to see a lot of downstream capacity coming in at both segments."

"We are looking at more like Rs 30,000 crore in three–four years."

Satish Pai, Managing Director, Ashok Leyland

The Ashok Leyland managing director pointed out that electricals, autos, cookware and construction sectors were driving the demand.

Hindalco's consolidated net profit increased 32% to Rs 3,174 crore in the quarter ended March, beating analysts' estimates. Pai highlighted that both the copper and aluminium segments recorded a strong quarter.

Nuvama Research maintains a 'hold' rating on the stock and raised its target price to Rs 732 per share from the earlier Rs 651 apiece, implying a potential upside of 8.7% from the previous close.

The brokerage raised its estimates for consolidated Ebitda margin by 8%/5% for the current and the next fiscals.

Shares of Hindalco rose as much as 2.41% during the day to Rs 689.50 apiece on the NSE. It was trading 1.11% higher at Rs 681 per share, compared to a 0.06% advance in the benchmark Nifty at 10:29 a.m.

The share price has risen 61% in the last 12 months and 10% on a year-to-date basis. . Total traded volume so far in the day stood at 0.47 times its 30-day average. The relative strength index was at 66.31.

Twenty-four out of the 27 analysts tracking the company have a 'buy' rating on the stock, two recommend 'hold' and one suggests 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 9%.