Hindalco Reports 20% Standalone Profit Growth in Q2, Announces Major Capacity Expansion

Hindalco Industries Limited, a key player in the metals sector, announced its financial results for the second quarter ending September 30. The company posted a standalone net profit of ₹2,266 crore, a notable increase of 20% compared to ₹1,891 crore in the same period last year.

Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA), a measure of operational profitability, saw a substantial rise of 36% to ₹3,740 crore from ₹2,749 crore a year ago. This improvement boosted the EBITDA margins to 15% from 12.3%, indicating enhanced operational efficiency.

Revenue from operations also grew by 11.3% year-on-year, reaching ₹24,780 crore. The Aluminium business performed robustly, with EBITDA at ₹4,785 crore, surpassing market expectations. The Copper business reported EBITDA of ₹634 crore, slightly below estimates.

In a significant strategic move, Hindalco revealed plans to expand the capacity of its Aditya Aluminum unit by an additional 193KT, bringing the total capacity to 563KT. This expansion, currently at 370KT and fully utilized, will involve an investment of ₹10,225 crore, to be funded through internal accruals and debt. The new capacity is slated to come online by the financial year 2029.

Impact: These strong standalone results and the ambitious capacity expansion plan are positive indicators for Hindalco's future growth prospects, potentially boosting investor confidence despite concerns from its subsidiary Novelis' recent results. The expansion signals a commitment to increasing market share and leveraging demand. Rating: 8/10.

Difficult Terms Explained: EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation): This financial metric represents a company's operating performance before accounting for non-operating expenses such as interest and taxes, and non-cash expenses like depreciation and amortization. It is used to evaluate a company's core profitability.