Hindalco Industries Limited — Q4 FY25 earnings call

Call held 20 May 2025

Management summary

Hindalco Industries reported a strong Q4 FY25, with consolidated EBITDA growing 24% YoY to Rs. 9,774 crores and net profit up 66% YoY to Rs. 5,284 crores, primarily driven by exceptional performance in its Indian aluminum businesses. The Indian upstream segment achieved record EBITDA of Rs. 4,838 crores and EBITDA per ton of $1,684. However, Novelis faced headwinds with an 8% YoY decline in EBITDA to $473 million due to higher scrap costs and operating expenses, exacerbated by a $40 million quarterly impact from US tariffs. The company maintains a robust balance sheet with net debt to EBITDA at 1.06x and is actively pursuing strategic expansion projects and sustainability initiatives.

Highlights

  • Consolidated business segment EBITDA increased 24% year-on-year to Rs. 9,774 crores.

  • Consolidated net profit after tax grew 66% year-on-year to Rs. 5,284 crores.

  • Indian Aluminum Upstream EBITDA reached a record Rs. 4,838 crores, up 79% year-on-year, with EBITDA per ton at $1,684 (up 74% YoY).

  • Indian Downstream Aluminum achieved an all-time high quarterly EBITDA of Rs. 219 crores, a 52% year-on-year increase, with EBITDA per ton at $240 (up 46% YoY).

  • The company maintained a strong balance sheet with net debt to EBITDA at 1.06x at the end of March 2025, significantly lower than the previous year.

  • Hindalco was recognized as the world's most sustainable aluminum company for the fifth consecutive year.

Concerns

  • Novelis' quarterly EBITDA declined 8% year-on-year to $473 million due to higher aluminum scrap prices and operating costs.

  • Novelis' EBITDA per ton stood at $494, down 9% year-on-year from $540.

  • Copper EBITDA decreased 21% year-on-year to Rs. 614 crores due to lower TcRc.

  • Novelis is experiencing a $40 million per quarter negative impact from US tariffs on certain imports.

Key financials

  1. Consolidated EBITDA ₹9,774 Cr +24%YoY
  2. Consolidated PAT ₹5,284 Cr +66%YoY
  3. Indian Operations EBITDA ₹5,671 Cr +56%YoY
  4. Indian Operations PAT ₹3,208 Cr +63%YoY
  5. Net Debt to EBITDA 1.06×

What they filed

Q1 FY27: revenue up 32.1%, net profit up 75.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue58,203 58,390 64,890 64,232 66,058 +13%66,521 +14%78,133 +20%84,825 +32%
EBITDA7,883 7,583 8,836 7,906 8,966 +14%7,991 +5%10,014 +13%13,932 +76%
Net profit3,909 3,735 5,284 4,004 4,741 +21%2,049 −45%2,597 −51%7,013 +75%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

SegmentEBITDAEBITDA per ton
Novelis473 Mn494 $
Indian Upstream Aluminum4,838 Mn1,684 $
Indian Downstream Aluminum219 Mn240 $
Copper Business614 Mn—

Capital allocation

high confidence
  • Capex ₹7,500 Cr
    • Upstream projects
    • Downstream expansion (FRP, Silvassa Extrusion, Copper IGT, Aluminum AC fin, battery enclosure facility, Aditya FRP project, Specialty Alumina project)
    So this current year the guidance is about Rs. 7,500 crores to Rs. 8,000 crores. I think the next year will be peak when we will start to have many of the upstream projects kicking in. But let me give you that guidance towards 3rd Quarter of this year when we know exactly what the cash out will be. But this year, our guidance is about Rs. 7,500 crores to Rs. 8,000 crores. Last year we spent Rs. 6,500 crores, just for comparison.
  • Debt Net ₹35,332 Cr · 1.1× EBITDA
    On the balance sheet side, our consolidated net debt stands at Rs. 35,332 crores. In the Indian operations, we have a net cash of Rs. 7,187 crores, while Novelis' net debt stands at Rs. 43,485 crores at the end of March 2025. Hindalco, at the consolidated level, continues to maintain a strong balance sheet with a net debt to EBITDA well below 2x at 1.06x at the end of March 2025, which is much lower than last year.
  • M&A Bandha coal mine Acquisition · Pending regulatory · Consideration ₹[object Object] (cash)

    To meet the Company's strategic objective of securing resources for its aluminum smelter. This coal mine has a life of around 45 years and is within 20 kilometers from our Mahan smelter and will help build a sustainable coal supply chain in the foreseeable future.

    Will spend another Rs. 4,000 crores over the life of mine. Rupees per million Kcal will be lower than NCL today.

    The proposed acquisition of the Bandha coal mine by Hindalco, subject to shareholders and other regulatory approvals, aims to meet the Company's strategic objective of securing resources for its aluminum smelter. This coal mine has a life of around 45 years and is within 20 kilometers from our Mahan smelter and will help build a sustainable coal supply chain in the foreseeable future.
  • M&A Novelis Fairmont facility Divestment · Pending regulatory

    To consolidate capacity and drive higher asset utilization.

    So, on Fairmont, after announcing that we were moving towards closing the facility in late March, we were approached in early April, we have entered into a non-binding letter of intent to see if we can sell the property. That time period is coming to an end, and we will see if we can get to an agreement or not. If not, we will move forward with the closure of Fairmont over the next few months.
  • Liquidity Cash ₹7,187 Cr Indian operations have net cash of Rs. 7,187 crores.
    In the Indian operations, we have a net cash of Rs. 7,187 crores

Guidance & targets

Hedging

  • Indian Aluminum Commodity Hedging Hedging · Q1 FY26 · High confidence 15%
    In our Indian aluminum business, for Q1 FY '26, we are currently hedged at around 15% of the commodity at a price of $2,695 per ton

    — Satish Pai

  • Indian Aluminum Currency Hedging Hedging · Q1 FY26 · High confidence 13%
    and hedged 13% of currency at Rs. 86 per dollar.

    — Satish Pai

Renewable Energy Capacity

  • Additional Solar Capacity Renewable Energy Capacity · H1 CY25 · High confidence 9 MW
    We are set to add another 9 megawatts of solar and 100 megawatts of hybrid capacity with storage in the first half of Calendar Year '25.

    — Satish Pai

  • Additional Hybrid Capacity with Storage Renewable Energy Capacity · H1 CY25 · High confidence 100 MW

    — Satish Pai

  • Total Renewable Capacity Target Renewable Energy Capacity · H1 CY25 · High confidence 300 MW
    Post this, we are well aligned towards our target of reaching 300 megawatts of renewable capacity in the first half of Calendar Year '25.

    — Satish Pai

Downstream EBITDA per ton (India)

  • Downstream EBITDA per ton Downstream EBITDA per ton (India) · FY26 · Medium confidence $250 to $300
    I have been sort of internally guiding $250 to $300. It depends a little bit on how the FRP ramps up, how Silvassa gets commissioned. But I think it's between $250 to $300 this year.

    — Satish Pai

  • Downstream EBITDA per ton (Mid-term) Downstream EBITDA per ton (India) · Mid-term · Medium confidence $300-plus
    But certainly, we are aiming for the $300-plus EBITDA per ton in India in the mid-term.

    — Satish Pai

FRP Sales Volume (India)

  • Additional FRP 2A Sales FRP Sales Volume (India) · FY26 · High confidence 60 KT to 70 KT
    So it's a little bit complicated in the sense that the FRP 2A, 60 KT will be sold this year. 60 KT to 70 KT, that's additional.

    — Satish Pai

Downstream Capacity (India)

  • Total Downstream Capacity Downstream Capacity (India) · High confidence 600 KTPA
    Our Aditya FRP project remains on track with target commissioning in FY '26, taking total downstream capacity to 600 KTPA.

    — Satish Pai

Alumina Sales Volume

  • Alumina Sales Volume Alumina Sales Volume · Q1 FY26 · High confidence 190 KT
    And the alumina sales, we sold 172 KT in the last quarter, and we will be selling about 190 KT in Q1.

    — Satish Pai

  • Alumina Sales Volume (Annual) Alumina Sales Volume · Annual · High confidence 700 KT to 800 KT
    Safe to assume that we can do 700 KT to 800 KT. They asked me for a quarter, so I gave a quarter. But yes, safe to assume 700 KT to 800 KT.

    — Satish Pai

Aluminum COP

  • Aluminum Cost of Production Aluminum COP · Q1 FY26 · High confidence Flat to 1% up
    In Q4 we were 1% down versus Q3. And looking at Q1, we could be flat to 1% up, because CP coke prices have gone up, coal looks okay for now. So, flat to 1% up in Q1.

    — Satish Pai

Aditya FRP

  • Aditya FRP Commercial Sales Aditya FRP · FY26 · High confidence 60 KT to 70 KT
    June will be where the volumes will pick up. We are planning about 60 KT to 70 KT of commercial sales this year.

    — Satish Pai

Coal Production

  • Chakla Coal Mine Production Start Coal Production · FY27 · High confidence December next year
    So, Chakla, the box cut we are expecting to be somewhere around March, April of next year. So the coal production should start probably by December of next year.

    — Satish Pai

  • Bandha Coal Mine Full Benefit Coal Production · FY28 · High confidence FY28
    I think FY '28 will see the full benefit because even Bandha, the new mine that we should be getting, actually there box cut starts even earlier, but the stripping ratio is high. So by FY '28 you should have both Chakla and Bandha running, which will be a major relief to Hindalco.

    — Satish Pai

Copper EBITDA

  • Quarterly Copper EBITDA Run Rate Copper EBITDA · Quarterly · High confidence Rs. 600 crores
    Yes, I think, in the past we have been guiding Rs. 600 crores and doing more. But this time we will guide Rs. 600 crores and probably do Rs. 600 crores, Sumangal.

    — Satish Pai

Novelis Recycled Content

  • Recycled Content Target Novelis Recycled Content · FY30 · High confidence 75%
    Our 3x30 Vision drives this commitment to increase recycled content to 75% by FY '30

Novelis Capacity

  • Total Rolling Capacity Novelis Capacity · High confidence 5 million tons
    Alongside our ongoing high-return debottlenecking projects, our total rolling capacity will reach 5 million tons

Novelis EBITDA per ton

  • Novelis EBITDA per ton Novelis EBITDA per ton · High confidence $600
    and our EBITDA per ton is expected to reach $600.

Downstream EBITDA

  • Downstream EBITDA Quadruple Downstream EBITDA · FY30 · High confidence Quadruple
    and our target to quadruple our downstream EBITDA by FY '30 from the base of FY '24 remains intact.

What to watch in Q1 FY26

Novelis Fairmont Sale Status

Next few months
Current Non-binding LOI, period coming to an end
Target Agreement reached or closure initiated

Why it matters

Impacts asset base, operational efficiency, and potential one-time gains/losses for Novelis.

So, on Fairmont, after announcing that we were moving towards closing the facility in late March, we were approached in early April, we have entered into a non-binding letter of intent to see if we can sell the property. That time period is coming to an end, and we will see if we can get to an agreement or not. If not, we will move forward with the closure of Fairmont over the next few months.

Risks & concerns

  • Global Economic Uncertainty & Trade Tensions

    medium

    IMF projects global GDP growth to slow from 3.3% in 2024 to 2.8% in 2025 amid US trade policy and rising trade tensions.

    Management acknowledged

  • Novelis Tariff Impact

    medium

    A $40 million per quarter negative impact due to US tariffs on imports from Canada and South Korea, with resolution dependent on USMCA 2.0 and exemptions.

    Management acknowledged

  • Elevated Scrap Prices & Supply Tightness

    medium

    Demand for scrap is increasing faster than supply due to new capacities, impacting Novelis' margins, though Midwest premium helps mitigate.

    Management acknowledged

  • Copper TcRc Decline

    medium

    Lower TcRc led to a 21% YoY decline in copper EBITDA, and the market is expected to remain under pressure.

    Management acknowledged

  • Alumina Price Volatility

    low

    Alumina prices can be volatile due to factors like Guinea's supply, but planning assumes a range of $350-$400.

    Management acknowledged

Q&A highlights

6 direct
Downstream Aluminum EBITDA per ton outlook Direct
So, I think that over the next few quarters, Amit, you are going to see the product mix gradually improving and stabilizing. So, in the short term, in Q4 there was a lot of packaging, foil stock that added, and foil stock demand was very high so the pricing was also very good. We also started to put more value-added engineered products like the battery enclosures. And you are going to see things like aluminum AC fin, and on the copper side IGT. So, all that is going to come out in FY '26. So, we are fairly confident that in FY '26 and going forward, the downstream EBITDA is going to steadily increase.

Clarifies that the strong Q4 downstream EBITDA per ton is expected to be a structural improvement driven by product mix, not a one-off.

Asked by Amit Dixit

Greenhouse Gas Emission Intensity Partial
See, if you have got 90% coal around that 19 is the theoretical number that you can get to. So, until our 100 megawatts of round-the-clock renewables kicks in in Aditya, that's when you will start to see the first phase, and then you will see the carbon intensity going down. But you have to realize, let's take alumina, Belgavi for more than half the year was running completely on renewables. So our alumina carbon footprint has dramatically gone down. Now, if you take Dahej and copper, we now have a hybrid power being fed in. So the carbon intensity of the copper has also significantly gone down. So the real challenge for us is the aluminum smelter, and that will only go down as more round the clock power starts to come in renewables.

Explains why aluminum smelter GHG intensity has remained flat despite renewable additions, highlighting the challenge of round-the-clock power for smelters, while other segments have seen reductions.

Asked by Amit Dixit

Bandha Coal Mine Acquisition & Novelis Fairmont Sale Direct
And now, as per the regulations, and as we said we still got some more clarifications to get from the government, but Bandha has now got its mining lease, that means FC1, FC2, EC have all been done. And hence, as per the regulations, we can take over the subsidiary at cost, which is what we have today presented to the Board and we are progressing with, and we will take shareholder approval. But once we get Bandha, Mahan is secured, because Bandha is 18.5 kilometers from Mahan. So, the future of Mahan, any further expansion of smelter in Mahan, we are now secured from a coal point of view. So it's a fairly significant event for Hindalco. ... So, on Fairmont, after announcing that we were moving towards closing the facility in late March, we were approached in early April, we have entered into a non-binding letter of intent to see if we can sell the property. That time period is coming to an end, and we will see if we can get to an agreement or not. If not, we will move forward with the closure of Fairmont over the next few months.

Provides updates on two significant strategic moves: securing coal for Mahan smelter through Bandha acquisition and the potential divestment of Novelis' Fairmont facility.

Asked by Prateek Singh

Indian Aluminum Imports Surge Direct
So, very specifically, this sudden splurge was because of aluminum coming to make solar panels. So there was a big demand for solar panels that were being assembled, and a lot of that aluminum came in at cheap price from China. Government has subsequently put tariffs and duties on it. And I do not think you are going to see that. But it was this sudden splurge from about 1 million to 1.2 million, a large part of it was aluminum for solar frameworks.

Explains the reason behind the sharp increase in non-scrap aluminum imports, attributing it to solar panel demand from China, and indicates that this trend is unlikely to continue due to new tariffs.

Asked by Prateek Singh

Novelis Tariff Impact and USMCA 2.0 Direct
So I think that we have been pretty, pretty consistent about the fact that we see trade deals happening. We see, in our view, timing to be determined. But we think that there will be a USMCA 2.0. And really, when we said neutral to positive, it was taking into account that some trade deals are bound to happen. The timing of it is becoming a bit of a factor of volatility. And the reason why it is negative for the time being is awaiting some of these deals to happen. ... The one that really is very high on the radar is the importation that we have to make from Kingston, Canada. And that is why I made specific reference to USMCA 2.0. Because if that gets taken care of, in principle, these tariffs will stop bothering us.

Clarifies the current negative impact of tariffs on Novelis ($40 million/quarter) and links it to the delay in USMCA 2.0, which is expected to neutralize the impact, particularly for Canadian imports.

Asked by Satyadeep Jain

Scrap Market Tightness and Mitigation Direct
Yes. So, a couple of things here. Very clearly demand for scrap is going to go up because of new capacities that are coming in. A lot of industry is following the model that we have been implementing over the last decade. We ourselves will need more scrap as we commission new capacities, for example, as we have commissioned Guthrie; on the other end of the world, as we have commissioned the 100 KT expansion in Korea. All this means that we ourselves will need more scrap, and demand is going up faster than the supply. And we are working on them, that's exactly what we are working on, opening up new sources. ... Now, remember one thing, I mean, to be amply clear. As we see the trends, I said it at our last earnings call, if you go back. Right now we are in the phase of cycling over last year. We do not see any worsening of the situation as compared to the last two quarters. I mean, it is just that we need two more quarters of cycling over the strengthening of the scrap prices. So at this time, in fact, Q4 was actually an improvement on Q3 and the elevated premium, particularly the Midwest premium, is coming to be of help. So to be clear that things are not getting any worse. I would rather say that things have gotten a bit better.

Management acknowledges the increasing demand for scrap due to new capacities but states that the situation is not worsening, with Q4 showing improvement and elevated Midwest premium helping.

Asked by Somaiah V

Alumina Pricing Outlook Direct
Prices are between $350 to $400. The reason it's spiked is because of what Guinea did, because it's such a large supplier of bauxite to China and many alumina refineries. Only thing I can say is Guinea remains a completely volatile country. So it can always happen. But when we do our planning and budgeting, we assume that it's going to be between $350 and $400.

Provides management's view on alumina pricing, attributing past spikes to Guinea's volatility and setting a planning range of $350-$400, which is crucial for cost management.

Asked by Prateek Singh

3 min read 6 chapters

Detailed narrative

Strong Q4 FY25 Performance & Balance Sheet

Hindalco reported a robust Q4 FY25, with consolidated business segment EBITDA increasing 24% year-on-year to Rs. 9,774 crores and consolidated net profit after tax rising 66% year-on-year to Rs. 5,284 crores. The company maintained a strong balance sheet, with net debt to EBITDA at 1.06x as of March 2025, significantly lower than the previous year. Strategic CAPEX in India is aligned with cash flow generation, ensuring financial prudence, with FY25 spend at Rs. 6,500 crores and FY26 guidance set at Rs. 7,500-8,000 crores.

Indian Aluminum Business Excellence

The Indian aluminum upstream business achieved a record quarterly EBITDA of Rs. 4,838 crores, marking a 79% year-on-year increase, driven by lower input costs and favorable macros. EBITDA per ton for this segment stood at $1,684, up 74% year-on-year, and margins reached a record high of 47%. The downstream aluminum business also delivered an all-time high quarterly EBITDA of Rs. 219 crores, a 52% year-on-year growth, with EBITDA per ton at $240, reflecting improved realizations and product mix.

Novelis Performance & Tariff Headwinds

Novelis reported shipments of 957 KT, a 1% year-on-year increase. However, its quarterly EBITDA declined 8% year-on-year to $473 million, resulting in an EBITDA per ton of $494, down 9% year-on-year from $540. This was primarily due to higher aluminum scrap prices, increased operating costs, and a $40 million quarterly negative impact from US tariffs on imports from Canada and South Korea. Management is actively seeking exemptions and anticipates resolution through USMCA 2.0 to mitigate these impacts.

Strategic Expansion & Resource Security

All major expansion projects, including Novelis' Bay Minette project (over 90% engineering complete), are progressing as planned. In India, the company is advancing the Chakla and Meenakshi coal mines, Aditya smelter expansion, Kansariguda alumina refinery, and copper smelter expansion. The proposed acquisition of the Bandha coal mine, with a 45-year life and located 18.5 km from the Mahan smelter, is crucial for securing long-term coal supply for the Mahan smelter, with full benefits expected by FY28.

Sustainability Leadership & Renewable Energy Initiatives

Hindalco has been recognized as the world's most sustainable aluminum company for the fifth consecutive year, achieving the highest-ever ESG scores in S&P Global CSA ranking. The company is committed to water positivity, with 16 of 19 sites meeting zero liquid discharge standards. It commissioned 6.3 MW of solar capacity at Mahan, with plans to add another 9 MW solar and 100 MW hybrid capacity in H1 CY25, aiming for a total of 300 MW renewable capacity. Aluminum-specific GHG emissions in FY25 were 19.39 tons of CO2 per ton of aluminum, flat compared to the last fiscal.

Focus on Value-Added Products & Downstream Growth

The company is strategically increasing its value-added product mix. The state-of-the-art battery enclosure facility in Chakan has delivered 10,000 enclosures to an Indian automotive OEM. The Aditya FRP project is on track for commissioning in FY26, targeting 600 KTPA total downstream capacity. The copper inner grooved tubes plant is also ready for commissioning, supporting India's electrification drive. Management expects downstream EBITDA per ton to steadily increase, targeting $250-$300 this year and $300-plus in the mid-term, driven by these engineered products.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Metals & Mining earnings calls