Hindalco Industries Ltd., an Indian aluminium and copper manufacturing company, and a subsidiary of the Aditya Birla Group, in its Q3 earnings call outlined major expansion plans including the Meenakshi mine acquisition, potentially reducing coal costs by 30%, INR40,000 crore investment in India, and Novelis’s $6 billion three-year CapEx. Key projects include the Aditya alumina refinery expansion; INR7,500-8,000 crores, copper recycling plant; INR2,700 crores, and smelter expansions. Management addressed US aluminum tariffs, detailed their hedging strategy; 35% commodity hedged at $2,600/ton, and provided production forecasts of alumina. India CapEx plans show INR6,000 crores for FY25, with INR4,400 crores already spent and INR8,000 crores for FY26, while noting Novelis faces challenges with peaking scrap pricing but benefits from the company’s integrated business model.
Hindalco Industries delivered exceptional Q3 results with consolidated net profit surging 60.2% to INR3,735 crore and revenue growing 11% to INR58,390 crore, driven by strong Indian operations. The aluminium upstream segment achieved industry-leading 42% margins with EBITDA jumping 73% to INR4,222 crore, while copper showed solid 18% EBITDA growth to INR777 crore. However, subsidiary Novelis faced challenges with declining shipments and a 19% drop in adjusted EBITDA to $367 million. Notable developments included the Meenakshi coal mines acquisition, sustainability recognition with a top 1% S&P Global ranking and India’s first Copper Mark certification, and an upcoming CFO transition to Bharat Goenka in April 2025.
Continue Reading: Discover the Vital Insights from Hindalco Industries Ltd.’s Earnings Call!
Financial/Operational Metrics:
- Total Revenue: INR58,390 crore, up 10.6% YoY.
- Net Profit: INR3,735 crore, up 60% YoY.
- EPS: INR16.82, up 60% YoY.
- Operating Profit: INR7,583 crore, up 29% YoY.
Outlook:
- Planned Renewable Energy Expansion: 9 MW solar and 100 MW hybrid (H1 CY25) and Additional 20 MW hybrid (H2 FY26).
- New Copper Inner Grooved Tube Plant: 25 Kt capacity, to be commissioned soon.
Analyst Crossfire:
• Coal Cost & Captive Mines (Sumangal Nevatia – Kotak Securities): The coal cost remained stable from Q2 to Q3, with similar expectations for Q4. Hindalco has adequate coal stocks. The Chakla mine is on track for development within the year, while Meenakshi will take two years for clearances and is crucial for long-term coal pricing security (Satish Pai – Managing Director).
• India CapEx Breakdown (Sumangal Nevatia – Kotak Securities): Hindalco plans to spend INR40,000 crores in India. The 850 Kt Aditya alumina refinery in Odisha (INR7,500-INR8,000 crores) and a 50 Kt copper recycling plant in Gujarat (INR2,700 crores) have begun construction. The 180 Kt aluminum smelter and 300 Kt copper smelter are awaiting environmental clearance. Peak CapEx spending is expected in FY27-28 (Satish Pai – Managing Director).
• Copper EBITDA Outlook & Meenakshi Mine Impact (Tarang Agarwal – Oldbridge): Despite a drop in TC/RC charges, Hindalco expects quarterly copper EBITDA to be around INR600 crores in FY26, down from the INR700-INR800 crores seen in FY25. This is due to strong demand for copper tubes, rods, and sulfuric acid. Once operational, Meenakshi is expected to reduce Hindalco’s coal costs by 30% from current levels (Satish Pai – Managing Director).
• Novelis US Import Duties Exemption & US Scrap Market & Pricing (Ashish Jain – Macquarie India, Indrajit Agarwal – CLSA): Novelis expects exemptions on US import tariffs, as its operations align with US goals of strengthening domestic supply chains. The historical precedent of securing exemptions supports this confidence. Scrap is unlikely to be subject to Section 232 tariffs. With US aluminum supply shortages, scrap imports will increase, affecting pricing across international markets like Europe, Asia, and South America (Steve Fisher – CEO, Novelis).
• Novelis CapEx Outlook & India Alumina Refinery Expansion (Satyadeep Jain – Ambit Capital): Novelis plans to spend an average of $2 billion annually from FY25 to FY27, totaling $6 billion. The Bay Minette project accounts for $2.8 billion, with additional spending on maintenance and expansion projects. Hindalco is developing a 3 million tons refinery, but the first phase will be 850 Kt, requiring ~INR7,000 crores. This includes infrastructure for future expansion (Dev Ahuja – CFO, Novelis).
• India CapEx & Cash Position, Alumina Price Trends (Parthiv Jhonsa – Anand Rathi): FY25 India CapEx is projected at INR8,000 crores, with INR6,000 crores spent so far (INR4,400 crores in the first nine months). Current net cash in India stands at INR1,944 crores. Alumina prices dropped from a recent high of ~$700 (due to Guinea bauxite disruption) to ~$500. Historically, prices range between $350–$400 (Satish Pai – Managing Director).
