Hindalco Industries Ltd.'s earnings in the second quarter of financial year 2025 beat analysts' estimates.
The aluminium producer's net profit increased 78% year-on-year to Rs 3,909 crore in the quarter ended Sept. 30, 2024, according to an exchange filing on Monday. This compares with the Rs 3,297.7-crore consensus estimate of analysts polled by Bloomberg.
Hindalco Q2 FY25 Results Highlights (Consolidated, YoY)
Revenue up 7.4% to Rs 58,203 crore versus Rs 54,169 crore (Bloomberg estimate: Rs 55,132.1 crore).
Ebitda up 40% to Rs 7,883 crore versus Rs 5,612 crore (Bloomberg estimate: Rs 7,189.8 crore).
Margin at 13.5% versus 10.4% (Bloomberg estimate: 13%).
Net profit up 78% to Rs 3,909 crore versus Rs 2,196 crore (Bloomberg estimate: Rs 3,297.7 crore).
What Led To Earnings Growth?
Hindalco's revenue growth was driven due to an uptick in revenue across all its major segments — Novelis, copper, aluminium upstream and downstream. The company's aluminium downstream and upstream segments saw the highest revenue uptick at 20% and 15%.
The margin was aided by downtick in power and fuel costs, other expenses and a Rs 1,171-crore reversal of finished goods inventory changes. Profit saw an uptick despite a Rs 514-crore exceptional expense.
Aluminum Business: Q2 Performance
Hindalco's aluminium upstream business' revenue was aided by higher average aluminium prices. This offset the 2% annual fall in shipments to 328 kilotonnes. The segment's Ebitda per tonne stood 80% higher year-on- year at $1,349 due to lower input costs.
The aluminium downstream business saw a revenue uptick due to higher volumes, where shipments grew 10% on an annual basis to 103 kilotonnes on the back of market recovery. The segment's Ebitda per tonne did see a 11% fall to $179 due to an unfavourable product mix.
Copper Business: Q2 Performance
Hindalco's copper business saw a revenue uptick due to higher average copper prices during the quarter, This offset the 10–13% drop in copper metal and CC rod shipments.
Way Forward: Capacity Expansion
In the aluminium segment, Hindalco's Aditya FRP project is expected to commission in fiscal 2026, which will help grow its total downstream capacity to 600 kilotonnes. The 180-kilotonne expansion of its aluminium upstream capacity will help increase its total upstream capacity to 1.52 million tonnes. This will help significantly boost sales of low-carbon aluminium in the future for Hindalco.
The company is also setting up an 850-kilotonne greenfield alumina refinery that will help in cost savings.
In the copper segment, the 230–300-kilotonne smelting capacity expansion will take its total upstream capacity to 800 kilotonnes. The company will also be commissioning India's first 25-kilotonne greenfield Inner Grooved Tubes plant in January 2025.
Hindalco will also be setting up India's first e-waste and copper scrap recycling plant. The first phase of this plant is currently underway.
Earnings Concall Highlights
Novelis
Sees tough next few quarters for Novelis due to high scrap prices.
Expects Trump administration to be good for Novelis US operations.
Company waiting for the right market conditions for Novelis initial public offering, targets premium valuations for the company
Pricing
Expects aluminium prices to inch up 1–1.5% quarter on quarter in the third quarter.
Company worried about cheaper Chinese imports.
Capex & Capacity
Company has planned capex for brownfield projects in Aditya Aluminium, Dahej
To spend Rs 2,000 crore to build copper foil plant.
Shares of Hindalco closed 0.75% higher at Rs 655.35 apiece on the NSE before the results were announced, compared to a 0.03% decline in the benchmark Nifty 50.
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