Hindalco Industries Limited

Hindalco reported a consolidated EBITDA of INR 10,812 crores for Q4 FY26, marking an 11% year-on-year increase. However, the consolidated profit after tax (PAT) declined 51% year-on-year to INR 2,597 crores, primarily due to exceptional items^📎, including the impact of the Novelis Oswego plant fire. Excluding these exceptional items^📎, the adjusted consolidated PAT stood at INR 5,796 crores, reflecting a 10% year-on-year growth. The company's consolidated cash flows amounted to INR 21,858 crores, an 11% YoY growth, while capital expenditures increased 47% YoY to INR 31,619 crores.

The India business segment delivered robust results, with EBITDA increasing 17% year-on-year to INR 6,610 crores and PAT growing 11% year-on-year to INR 3,549 crores. The India upstream aluminum business achieved an EBITDA of INR 5,448 crores, up 13% YoY, with an EBITDA per ton of $1,756 and 48% margins. The Indian downstream aluminum business saw shipments grow 18% YoY to 124 KT, resulting in a quarterly EBITDA of INR 255 crores, up 16% YoY, with an EBITDA per ton of $226. The copper business recorded a strong quarterly EBITDA of INR 907 crores, a 48% YoY increase, driven by better realization in byproducts and operational efficiencies.

Novelis reported an adjusted EBITDA of $498 million, or $543 per ton, for Q4 FY26, representing a 5% year-on-year increase despite a 4% YoY decline in shipments to 917 KT due to the Oswego fire. The company has achieved a $200 million annual run rate for cost savings, up from an initial target of $75 million in April 2025. Novelis maintains its long-term EBITDA guidance of $600 per ton and is committed to a structural cost reduction program aiming for $350 million to $400 million by FY28 exit. The Bay Minette 600 KT greenfield rolling and recycling facility is scheduled for completion this year, with a ramp-up period of 18-24 months to achieve an EBITDA per ton north of $1,000 from that facility.

Hindalco's capital expenditures for FY26 totaled INR 31,619 crores, a 47% YoY increase, primarily for capacity expansion. For FY27, India capex is projected at INR 12,000 crores, and Novelis capex at $2.3-2.4 billion, largely for Bay Minette. The company expects India capex to rise to INR 15,000-17,000 crores in FY28. Despite these investments, the consolidated net debt-to-EBITDA ratio stood at 1.83 at March 2026 end, with a commitment to maintain it around 2 times. The consolidated net debt is projected to peak between INR 80,000 crores and INR 90,000 crores over the next two years.

Hindalco continues to demonstrate strong leadership in ESG, being ranked among the top 1% in S&P Global ESG scores within the aluminum industry for 2026. The company achieved a record low aluminum-specific GHG footprint of 19.2 tons of CO2 per ton of aluminum produced in FY26. Waste management efforts resulted in 88% of total waste being recycled or reused, including 131% bauxite residue, 106% ash, and 126% copper slag recycling. Renewable energy capacity reached 470 megawatts, with plans to add 53 megawatts next quarter and 30 megawatts of storage-based power, targeting 523 megawatts by Q1 FY27.

The global aluminum market is expected to be in a 1.5 million ton deficit for calendar year 2026, driven by strong demand and supply disruptions from West Asia, which is supporting prices. In contrast, the global copper concentrate market remains tight in 2026, leading to record low spot TC/RCs of minus $0.21 to $0.25 per pound. While high sulfuric acid prices partially offset the impact of low TC/RCs, management anticipates copper EBITDA to normalize to INR 600-700 crores per quarter from the current INR 907 crores.

Hindalco is accelerating its downstream expansion and diversifying scrap sourcing. The Aditya FRP plant and battery enclosure facility are ramping up, and the Aditya battery foil unit and Taloja AC Fin Facility have been commissioned. In copper, the inner grooved tubes project (35 KT capacity) is undergoing customer qualification, and the 50 KT recycling Pakhajan plant for e-waste scrap is set to commission in August. The company is developing supply chains for end-of-life automotive scrap, aiming for over $600 per ton EBITDA from this strategy, and plans to commission the first 180 pots of the Aditya smelter by December '27, with another 180 by December '28.