Hindalco Industries Reports 21% Net Profit Jump in Q2 FY26, Surpassing Estimates

Hindalco Industries has reported a strong second quarter for fiscal year 2026, with its net profit surging by 21% to Rs 4,741 crore, surpassing Bloomberg's consensus estimate of Rs 4,320 crore. This marks a significant increase from the Rs 3,909 crore profit recorded in the same quarter of the previous fiscal year. The company's revenue from operations also saw a healthy rise of 13% year-on-year, reaching Rs 66,058 crore, which was above the street's expectation of Rs 64,963 crore. Earnings Before Interest, Taxation, Depreciation, and Amortisation (Ebitda) for the quarter stood at Rs 9,684 crore, a 6% increase from the prior year's Rs 9,100 crore, and comfortably ahead of Bloomberg's estimate of Rs 8,303 crore. This improvement in Ebitda was notably aided by reduced input coal costs.

Satish Pai, managing director of Hindalco Industries, highlighted the company's sustained growth momentum amidst global volatility, attributing the strong performance to the robust contribution from its India business, disciplined cost management, and operational efficiencies.

The India business reported a Profit After Tax (PAT) of Rs 3,059 crore, up 7% year-on-year, with revenues growing 10% to Rs 25,494 crore and Ebitda increasing by 15% to Rs 5,419 crore.

Hindalco's US subsidiary, Novelis, generated revenue of $4.74 billion, up from $4.3 billion last year, driven by higher aluminium prices. However, Novelis's Ebitda saw an 8.65% decline to $422 million, largely due to tariffs. Excluding a $54 million tariff impact, Novelis's Ebitda would have risen by 3% to $476 million. Management stated a mitigation strategy is in place, including relocating manufacturing, to counter tariff effects. Ebitda per tonne at Novelis remained below $500 for the fourth consecutive quarter at $448, down 8.4%, primarily due to tariffs.

Novelis's net income attributable to common shareholders increased by 27% to $163 million. Shipments remained flat at 941 kilotonne (KT). The company also provided an update on its Bay Minette project, with total costs expected at $5 billion and engineering 100% complete.

Segment-wise, Hindalco's aluminium upstream segment reported a revenue of Rs 10,078 crore (up 10%) and Ebitda of Rs 4,524 crore (up 22%). Downstream aluminium revenue rose 20% to Rs 3,809 crore, with Ebitda up 69% to Rs 261 crore. The copper segment posted revenue of Rs 14,563 crore, while its Ebitda decreased by 24% to Rs 634 crore.

Impact This strong earnings report is expected to positively influence Hindalco Industries' stock performance, potentially leading to increased investor confidence and a positive market reaction. The beat on profit and revenue, coupled with strategic updates on Novelis and ongoing projects, signals operational strength and resilience. The performance in the domestic market and efforts to mitigate international challenges are key positives. Rating: 7/10

Difficult terms Ebitda: Earnings Before Interest, Taxation, Depreciation, and Amortisation. It is a measure of a company's operating performance. PAT: Profit After Tax, the profit remaining after all expenses and taxes have been deducted. Tariffs: Taxes imposed by a government on imported or exported goods. Upstream: Refers to the early stages of a production process, such as mining or primary metal production. Downstream: Refers to the later stages of a production process, such as manufacturing finished products from raw materials. KT: Kilotonne, a unit of weight equal to 1,000 metric tons.