Hindalco Industries (HINDALCO) Q2 26/27 earnings summary

Executive summary

• Consolidated EBITDA rose 52% YoY to INR 13,869 crore and PAT increased 59% to INR 7,534 crore; India EBITDA rose 66% to INR 9,011 crore.

• Novelis net sales rose 25% to $5,942M and Adjusted EBITDA increased 20% to $508M, while rolled shipments declined 2% to 919 kt.

• Strength in upstream aluminum, record copper profitability, higher non-LME-linked earnings and progress at Novelis supported results.

Financial highlights

• India upstream aluminum revenue rose 33% YoY and EBITDA increased 55% to INR 7,009 crore; shipments grew 1%.

• India downstream aluminum shipments rose 6% to 119 KT; EBITDA increased 26% to INR 329 crore, or $289 per ton.

• Copper EBITDA reached a record INR 1,673 crore, up 164% YoY; INR 350–400 crore of gains were identified as non-repeatable.

• Novelis net income was $210M, up 29%; Adjusted EBITDA per tonne was $553, or $510 excluding $39M of Oswego insurance recoveries.

• Consolidated cash generation was INR 23,322 crore, up 57%, and capex was INR 20,719 crore, up 83%; Novelis adjusted free cash flow was negative $670M in Q2 and negative $1.804B YTD.

Outlook and guidance

• Novelis targets positive free cash flow and the start of deleveraging by FY27-end; long-term Adjusted EBITDA-per-ton guidance remains $600.

• Copper underlying quarterly EBITDA is expected at INR 1,200–1,300 crore, supported by sulfuric acid pricing, precious-metal sales and downstream products.

• Aluminum production costs rose 5% QoQ in Q2 and are expected to rise ~5% in Q3 before easing in Q4 as coal availability improves.

• FY27 capex is expected at INR 12,000–13,000 crore; Novelis expects FY27 capex at the top of its $2.1B–$2.4B range.

• India aluminum demand is expected to grow at ~7% CAGR; growth projects target at least teen IRRs at $2,600 aluminum prices.