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Hindalco Industries Limited — Q2 FY26
Hindalco delivered a resilient Q2 FY26 with consolidated EBITDA up 6% YoY to INR 9,104 crore and PAT up 21% to INR 4,741 crore, driven by strong India upstream aluminum (EBITDA +22% YoY, INR 4,524 crore) and record downstream EBITDA of INR 261 crore (+69% Y...
bullish
high
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Hindalco delivered a resilient Q2 FY26 with consolidated EBITDA up 6% YoY to INR 9,104 crore and PAT up 21% to INR 4,741 crore, driven by strong India upstream aluminum (EBITDA +22% YoY, INR 4,524 crore) and record downstream EBITDA of INR 261 crore (+69% YoY). Novelis adjusted EBITDA per ton exceeded $500 despite $54 million tariff impact, with mitigation run rate now at $125 million. India aluminum EBITDA margin remained best-in-class at 45%. Management guided for flat-to-1% higher costs in Q3 and reiterated consolidated net leverage below 2x despite $10 billion CapEx plan. Key risk: Bay Minette cost overrun to $5 billion and execution complexity could pressure returns if LME softens.
हिंडाल्को ने दूसरी तिमाही में मजबूत प्रदर्शन किया। कंपनी का कुल मुनाफा (EBITDA) पिछले साल से 6% बढ़कर 9,104 करोड़ रुपये हो गया। शुद्ध मुनाफा (PAT) 21% बढ़कर 4,741 करोड़ रुपये रहा। भारत में एल्युमीनियम कारोबार ने 22% ज्यादा मुनाफा कमाया। डाउनस्ट्रीम (तैयार उत्पाद) का मुनाफा 69% बढ़कर रिकॉर्ड 261 करोड़ रुपये पहुंच गया। नोवेलिस ने टैरिफ (आयात शुल्क) के बावजूद अच्छा प्रदर्शन किया। कंपनी का कर्ज नियंत्रण में है। अगली तिमाही में लागत स्थिर रहने का अनुमान है। मुख्य जोखिम: बे मिनेट प्रोजेक्ट की लागत बढ़कर 5 अरब डॉलर हो सकती है, जिससे मुनाफा कम हो सकता है।
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Bay Minette cost overrun and execution risk
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Novelis adjusted EBITDA per ton
$506
+3% YoY
Excluding tariff impact, adjusted EBITDA per ton was $505, exceeding $500 mark.
India aluminum downstream EBITDA
INR 261 crore
+69% YoY
All-time quarterly high driven by higher value additions and premiumization.
India aluminum EBITDA per ton
INR 1,521
+22% YoY
Global industry-leading in a monsoon quarter, reflecting cost discipline.
Novelis tariff mitigation run rate
$125 million
+25% vs prior quarter
Accelerated from $100 million target; on track for $300 million structural cost reduction by FY28.
What Changed vs Last Quarter
NEW
Consolidated net leverage below 2x through FY29
Management committed to keeping consolidated net debt-to-EBITDA below 2x over the next four years despite $10 billion CapEx plan.
NEW
Novelis structural cost reduction of $300 million by FY28 exit
Three-year program targeting permanent cost reduction through organizational restructuring and manufacturing optimization.
NEW
Oswego Hotmill startup next month
Outage impact is a timing issue; headwind this fiscal year will largely be recovered next year.
UPDATED
India CapEx of INR 11,000 crore in FY27
Next fiscal year CapEx expected to be around INR 11,000 crore, up from INR 8,500 crore in FY26.
DROPPED
Novelis FY26 cost savings target raised to >$100 million
Early actions from the $300 million structural cost reduction program have accelerated savings; exit rate target increased from $75 million to over $100 million.
DROPPED
India aluminium downstream EBITDA per ton target of $250-300
Management targets EBITDA per ton between $250 and $300 as volumes ramp up with new FRP capacity.
DROPPED
Novelis EBITDA anchor of $600 per ton remains target
Despite current headwinds, management maintains high confidence in achieving $600 per ton EBITDA through cost actions and tariff mitigation.
NEW RISK
Bay Minette cost overrun and execution risk
Project cost increased to ~$5 billion from $4.1 billion due to inflation and engineering complexity; IRR now slightly below double-digit.
NEW RISK
Hedging caps upside in strong LME environment
Aggressive short-term hedging (49% of Q4 at $2,760/ton) limits benefit from LME rally above $2,900.
NEW RISK
India cost inflation in monsoon quarter
Cost of production rose 3-4% QoQ in Q2 due to higher coal costs and planned shutdowns; Q3 expected flat to +1%.
RISK GONE
Elevated scrap prices and margin pressure
Higher scrap prices versus prior year and less stable product mix continue to pressure Novelis margins, though spreads are expected to improve.
RISK GONE
Subdued copper TC/RCs
Global concentrate market remains tight with spot TC/RCs at record lows; management expects TC/RCs to remain subdued for next couple of years.
RISK GONE
Renewable power project delays
RERTC projects are running late due to slow grid connectivity approvals, potentially impacting cost reduction timelines.
🤫 Topics management stopped discussing
Mentioned in Q2 FY25, Q3 FY25, Q4 FY25
The 600 KT greenfield rolling and recycling facility at Bay Minette is progressing steadily, with over 90% engineering complete.
Mentioned in Q3 FY25, Q4 FY25
Annual TC/RC benchmark for 2025 settled at $0.0545/lb, down 73% YoY, pressuring copper EBITDA which fell 21% in Q4.
Mentioned in Q1 FY26, Q2 FY25
Global concentrate market remains tight with spot TC/RCs at record lows; management expects TC/RCs to remain subdued for next couple of years.
Mentioned in Q1 FY25, Q1 FY26
Higher scrap prices versus prior year and less stable product mix continue to pressure Novelis margins, though spreads are expected to improve.
Mentioned in Q1 FY26, Q4 FY25
Management targets EBITDA per ton between $250 and $300 as volumes ramp up with new FRP capacity.
Fast read
Guidance and risk preview
Management committed to keeping consolidated net debt-to-EBITDA below 2x over the next four years despite $10 billion CapEx plan.
Project cost increased to ~$5 billion from $4.1 billion due to inflation and engineering complexity; IRR now slightly below double-digit.
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