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Hindalco Industries Q2 Results: Profit, Revenue Beat Estimates

Hindalco Industries achieved a strong Q2 performance, with the Ebitda rising 40% to Rs 7,883 crore and margin expanding to 13.5%, driven by robust aluminium and copper operations.

<div class="paragraphs"><p>Hindalco Industries' Q2 revenue growth of 7.4% and profit surge of 78% underscore its operational efficiency and market resilience amidst fluctuating global commodity prices. (Photo source: Hindalco Industries website)</p></div>
Hindalco Industries' Q2 revenue growth of 7.4% and profit surge of 78% underscore its operational efficiency and market resilience amidst fluctuating global commodity prices. (Photo source: Hindalco Industries website)

Hindalco Industries Ltd.'s earnings in the second quarter of financial year 2025 beat analysts' estimates.

The aluminium producer's net profit increased 78% year-on-year to Rs 3,909 crore in the quarter ended Sept. 30, 2024, according to an exchange filing on Monday. This compares with the Rs 3,297.7-crore consensus estimate of analysts polled by Bloomberg.

Hindalco Q2 FY25 Results Highlights (Consolidated, YoY)

  • Revenue up 7.4% to Rs 58,203 crore versus Rs 54,169 crore (Bloomberg estimate: Rs 55,132.1 crore).

  • Ebitda up 40% to Rs 7,883 crore versus Rs 5,612 crore (Bloomberg estimate: Rs 7,189.8 crore).

  • Margin at 13.5% versus 10.4% (Bloomberg estimate: 13%).

  • Net profit up 78% to Rs 3,909 crore versus Rs 2,196 crore (Bloomberg estimate: Rs 3,297.7 crore).

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What Led To Earnings Growth?

Hindalco's revenue growth was driven due to an uptick in revenue across all its major segments — Novelis, copper, aluminium upstream and downstream. The company's aluminium downstream and upstream segments saw the highest revenue uptick at 20% and 15%.

The margin was aided by downtick in power and fuel costs, other expenses and a Rs 1,171-crore reversal of finished goods inventory changes. Profit saw an uptick despite a Rs 514-crore exceptional expense.

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Aluminum Business: Q2 Performance

Hindalco's aluminium upstream business' revenue was aided by higher average aluminium prices. This offset the 2% annual fall in shipments to 328 kilotonnes. The segment's Ebitda per tonne stood 80% higher year-on- year at $1,349 due to lower input costs.

The aluminium downstream business saw a revenue uptick due to higher volumes, where shipments grew 10% on an annual basis to 103 kilotonnes on the back of market recovery. The segment's Ebitda per tonne did see a 11% fall to $179 due to an unfavourable product mix.

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Copper Business: Q2 Performance

Hindalco's copper business saw a revenue uptick due to higher average copper prices during the quarter, This offset the 10–13% drop in copper metal and CC rod shipments.

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Way Forward: Capacity Expansion

In the aluminium segment, Hindalco's Aditya FRP project is expected to commission in fiscal 2026, which will help grow its total downstream capacity to 600 kilotonnes. The 180-kilotonne expansion of its aluminium upstream capacity will help increase its total upstream capacity to 1.52 million tonnes. This will help significantly boost sales of low-carbon aluminium in the future for Hindalco.

The company is also setting up an 850-kilotonne greenfield alumina refinery that will help in cost savings.

In the copper segment, the 230–300-kilotonne smelting capacity expansion will take its total upstream capacity to 800 kilotonnes. The company will also be commissioning India's first 25-kilotonne greenfield Inner Grooved Tubes plant in January 2025.

Hindalco will also be setting up India's first e-waste and copper scrap recycling plant. The first phase of this plant is currently underway.

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Earnings Concall Highlights

Novelis

  • Sees tough next few quarters for Novelis due to high scrap prices.

  • Expects Trump administration to be good for Novelis US operations.

  • Company waiting for the right market conditions for Novelis initial public offering, targets premium valuations for the company

Pricing

  • Expects aluminium prices to inch up 1–1.5% quarter on quarter in the third quarter.

  • Company worried about cheaper Chinese imports.

Capex & Capacity

  • Company has planned capex for brownfield projects in Aditya Aluminium, Dahej

  • To spend Rs 2,000 crore to build copper foil plant.

Shares of Hindalco closed 0.75% higher at Rs 655.35 apiece on the NSE before the results were announced, compared to a 0.03% decline in the benchmark Nifty 50.

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