Hindalco Industries Limited

Hindalco reported a robust Q2 FY26, with consolidated business segment EBITDA increasing 6% year-on-year to INR9,104 crores. The consolidated net profit after tax also saw a significant rise of 21% year-on-year, reaching INR4,741 crores. This performance underscores the resilience of the integrated business model amidst varying market conditions and global economic shifts. The company's strong cash generation in H1 FY26 stood at INR8,762 crores, marking a 45% year-on-year growth.

Novelis recorded shipments of 941 Kt in Q2 FY26, nearly flat year-on-year compared to 945 Kt. Despite this, it achieved an Adjusted EBITDA of $506 per ton, surpassing the $500 mark, excluding a tariff impact^🌐 of $54 million. The company raised its FY26 exit savings run rate target to $125 million, up from $100 million, and is executing a 3-year $300 million structural cost reduction program targeting FY28 exit to enhance efficiency and margins. The Bay Minette project cost has been revised to $5 billion, with 50% attributed to inflation and 30-40% to complexity, but is now 100% complete in engineering.

The India business segment delivered strong results, with EBITDA growing 15% year-on-year to INR5,419 crores and net profit after tax up 7% to INR3,059 crores. India Upstream Aluminium saw a 22% year-on-year increase in quarterly EBITDA to INR4,524 crores, with EBITDA margins at 45% and EBITDA per ton of $1,521. The Indian Downstream Aluminium business achieved a record performance, with quarterly EBITDA up 69% year-on-year to INR261 crores and shipments rising 10% to 113 Kt, achieving an EBITDA per ton of $265.

The copper business faced challenges, with quarterly EBITDA declining 24% year-on-year to INR634 crores. This was primarily due to a sharp 73% decline in the annual benchmark TC/RCs for 2025, which were finalized at 5.45 cents per pound, down from 20.5 cents per pound in 2024. Despite this, CCR volumes increased 8% year-on-year to 97 Kt, and the e-waste and recycling project is on track for FY27 recommissioning, reinforcing the company's commitment to sustainability-driven growth.

Hindalco's capital expenditures rose 23% year-on-year to INR11,330 crores in H1 FY26, primarily for capacity expansions in Novelis and India. The company plans INR8,500 crores in capex for FY26 and INR11,000 crores for FY27. Management reiterated its commitment to maintaining a consolidated net debt to EBITDA ratio below 2 over the next four years, with the ratio standing at 1.23 as of September end, demonstrating a disciplined approach to capital allocation.

The company continues to make strong progress on circularity and responsible waste management, achieving 78% recycling/reuse of total waste generated. Specific recycling rates included 104% for bauxite residue (ex-Utkal), 96% for ash, and 119% for copper slag. Hindalco's renewable energy capacity reached 292 MW and is projected to increase to 522 MW by the end of FY26, including 130 MW of storage-based power, reflecting a strong commitment to clean energy and reducing carbon intensity.

Global aluminium supply and demand grew by 1% in the first 9 months of CY25, with China showing a cumulative deficit of 1.6 million tons and the rest of the world a surplus of 1.5 million tons, resulting in a broadly balanced market. India's aluminium demand is projected to grow 8% year-on-year to 1.5 million tons in Q2 FY26, driven by strong performance in electrical, solar, and automotive sectors. The MJP premium, currently sub-100 due to regional tariffs, is expected to recover above 100 in Q3/Q4 FY26.