Hindalco Industries Reports Better-Than-Expected Q2 Profit Driven by Strong Domestic Aluminium Sales

Aditya Birla Group's metals flagship, Hindalco Industries, reported a stronger-than-expected financial performance for the second quarter of the fiscal year, with net profit rising 18.4% quarter-on-quarter to ₹4,741 crore and revenue up 2.8% to ₹66,058 crore. The surge in profitability was significantly boosted by a higher inventory drawdown, which released approximately ₹1,436 crore in working capital, improving cash flows and margins. The company successfully leveraged rising global aluminium prices, which hovered between $2,450–$2,550 per tonne on the London Metal Exchange during the quarter. Hindalco's domestic operations were the primary growth driver, with its India upstream business revenue increasing by 10% year-on-year to ₹10,078 crore and downstream aluminium revenue growing 20% to ₹3,809 crore, fueled by demand from the automotive and renewables sectors, including electric vehicles (EVs). The company's copper segment, however, saw a decline in revenue and Ebitda due to volatile treatment charges and energy costs. Hindalco's global subsidiary, Novelis, contributed over 60% to group revenue, posting sequential revenue growth. Despite a disruptive fire at its Oswego, New York plant in September, which is expected to incur a $650 million (₹5,500 crore) hit, Novelis' profitability remained resilient, supported by insurance and efficiency programs. Hindalco plans to infuse $750 million in equity into Novelis. The company is also advancing its ambitious $5 billion greenfield plant project in Bay Minette, Alabama, which is on track for commissioning in the second half of 2026. Analysts noted that Hindalco's strong India business performance has effectively compensated for weaknesses at Novelis.

Impact: This news is highly impactful for Hindalco Industries and its investors. The better-than-expected results demonstrate strong operational execution and resilience, particularly in its domestic business, which is a positive sign for the company's financial health and stock performance. The ability to navigate challenges at Novelis while continuing growth in India highlights robust management strategies. The performance suggests Hindalco is well-positioned to capitalize on the growing demand for aluminium in India and globally. Rating: 8/10

Heading Difficult Terms: q-o-q (quarter-on-quarter): This refers to a comparison of financial results from the current quarter with those of the immediately preceding quarter. y-o-y (year-on-year): This compares financial results from the current quarter with the same quarter in the previous year. Ebitda (Earnings Before Interest, Taxes, Depreciation, and Amortization): A measure of a company's operating performance, indicating profitability before accounting for financing costs, taxes, and non-cash expenses. Inventory drawdown: This occurs when a company sells more goods than it produces, reducing its existing stock of inventory. This can improve cash flow and reduce storage costs. Working capital: The difference between a company's current assets (like cash and inventory) and its current liabilities (like short-term debts), representing the funds available for daily operations. LME (London Metal Exchange): A global marketplace where industrial metals are traded. Prices on the LME influence global commodity prices. kt (kilotonne): A unit of measurement for weight, equivalent to 1,000 metric tons. EVs (Electric Vehicles): Vehicles powered entirely by electricity. Capex (Capital Expenditure): Funds used by a company to acquire, upgrade, or maintain physical assets such as property, plant, or equipment. Greenfield plant: A new industrial facility built on undeveloped land. Commissioning: The process of putting a new plant or piece of equipment into operation for the first time.