Source: LIVEMINT
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Hindalco Industries Ltd ended FY25 on a strong note, reporting a consolidated Ebitda of ₹9,600 crore for the March quarter (Q4FY25), up nearly 40% year-on-year. While its India aluminium business delivered stellar margins, the global subsidiary Novelis continues to lag, keeping investors cautious.
The India upstream aluminium segment reported an Ebitda margin of 47%, with Ebitda per tonne at $1,684, up 74% on year. This performance wasn’t just cyclical; Hindalco has strengthened its structural cost advantage through backward integration and resource security, including the commissioning of captive coal mines like Bandha and Chakla.
The management expects upstream aluminium costs to remain flat in Q1FY26, despite rising calcined petroleum coke prices, as coal prices have stayed stable.
Read this | Hindalco ups the ante: More metal, stronger margins
Downstream aluminium volumes were steady, but an improved product mix helped Ebitda per tonne rise 46% to $240. The management is targeting $250-300 per tonne as new lines at Aditya FRP and Silvassa ramp up in FY26.
The copper business, however, was a drag. While rod volumes held steady, weaker treatment and refining charges pulled down segment Ebitda by 21% year-on-year to ₹614 crore. The company expects a stable ₹600 crore quarterly run rate in the near term. Over the long term, improving demand conditions should support pricing at the London Metal Exchange and aid India Ebitda.
Novelis remains a concern, though. Ebitda per tonne rose 22% sequentially to $494, breaking a three-quarter streak of declines. But volumes were flat at 957KT, and year-on-year margins remain under pressure.
Auto demand remains soft amid uncertainty over US tariffs, while elevated scrap prices have continued to weigh on profitability. In this context, the management has refrained from issuing near-term guidance. That said, there are early signs that recent cost and portfolio actions are yielding results.
Read this | Tata Steel Europe revival hinges on gains from Netherlands’ reorganization
Analysts at PL Capital remain cautious, noting that Novelis’ H1FY26 could be impacted by tariffs and a weak macro environment. They expect demand and margin conditions to improve as the US negotiates trade deals with the rest of the world.
For now, the brokerage has maintained its Novelis Ebitda per tonne estimates for FY26-27 at $440-480 till there is some visibility on the benefits of efficient scrap sourcing by Novelis.
Also read | India eyes inclusion of 25% steel, aluminium tariffs in BTA talks with US
With ₹7,187 crore in net cash in India and a capex plan of ₹7,500–8,000 crore for FY26, Hindalco is well-funded for growth. Investors will be watching to see if Novelis can deliver stable earnings in a challenging global environment. The Hindalco stock is up around 9% so far in 2025. While India continues to drive the narrative, a steadier Novelis could be the catalyst the market is waiting for.
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