Hindalco Industries delivered exceptional Q2 FY27 results, posting a consolidated net profit of ₹7,532 crore, up 59% year-on-year from ₹4,741 crore in Q2 FY6. The bottomline significantly exceeded Bloomberg estimates of ₹6,120.19 crore based on nine analyst estimates, with revenue from operations growing 39% YoY to ₹91,708 crore from ₹66,058 crore in the corresponding quarter last year. According to Business Standard, this represents a record quarterly performance for the Aditya Birla Group metals major. Earnings per share increased to ₹33.93 from ₹21.35 in the corresponding quarter last year, demonstrating strong operational leverage across the business. The company's integrated business model led by solid primary upstream business complemented by strong contributions from downstream operations drove this exceptional performance.
Hindalco faces mounting cost pressures from coal supply constraints, with aluminium production costs expected to rise another 5% sequentially in Q3FY27 as coal inventories at its key smelters fall to nearly half normal levels. As per Business Standard, coal availability in the northern region during October and November remained tight, with easing expected only in the fourth quarter. Managing Director Satish Pai explained that coal accounted for 50-60% of the cost increase, while calcined petroleum coke made up the remainder, with coal availability particularly tight during the monsoon quarter due to heavy rains affecting production and power plants drawing more coal amid high temperatures. The e-auction premium on coal in northern auctions reached as high as 200%, forcing the company to rely heavily on spot purchases. Coal inventories at Hindalco's Mahan and Renukoot smelters currently stand at 10-11 days against the normal requirement of 20-25 days, while the company's Aditya and Hirakud smelters in Odisha maintain over a month's inventory with no supply disruption. According to latest reports, coal costs for the company's India aluminium business could be around 5% higher in Q3 compared with Q2, though costs are expected to start moderating in Q4 as coal availability improves with winter onset. Pai indicated that costs should begin to ease in the March quarter as the coal situation settles and power demand in northern areas declines during winter.
Hindalco's Q2FY27 performance showed strong sequential momentum with revenue at ₹91,708 crore versus estimates of ₹83,546 crore, up 8.1% sequentially from ₹84,825 crore. EBITDA came in at ₹12,814 crore versus estimates of ₹11,486 crore, down 8% sequentially from ₹13,932 crore, with EBITDA margin at 14% versus estimates of 13.7% and 16.4% in the previous quarter. The company reported a one-time gain of ₹284 crore, compared with a loss of ₹2,299 crore in the previous quarter. Net profit at ₹7,532 crore versus estimates of ₹6,108 crore, up 7.4% sequentially from ₹7,013 crore, demonstrating the company's ability to maintain strong profitability despite some sequential margin compression. Consolidated profit before tax (PBT), after exceptional items, reached ₹10,594 crore against ₹6,540 crore in Q2 FY6, highlighting the company's ability to convert revenue growth into bottomline expansion despite challenging market conditions.
Hindalco's Aluminium Upstream business reported robust performance with revenue of ₹13,364 crore, up 33% from ₹10,078 crore in Q2 FY6. Segment EBITDA increased 55% YoY to ₹7,009 crore from ₹4,524 crore, with EBITDA per tonne rising 40% to $2,125 from $1,521 in the corresponding quarter last year. The Aluminium Upstream EBITDA margin stood at 52% during the quarter, supported by favourable market conditions, higher shipments and operational performance. In the Aluminium Downstream business, sales increased 6% YoY to 119 kilotonnes with revenue rising 45% to ₹5,511 crore. Segment EBITDA increased 26% to ₹329 crore, while EBITDA per tonne increased 9% to $289, with the company scaling up production at its Aluminium Battery Foil and flat-rolled products plants at Aditya, along with the Coated AC Fins plant at Taloja. Despite cost pressures, the aluminium upstream business remains the largest contributor to Q2 performance.
The copper business delivered its highest-ever quarterly EBITDA of ₹1,673 crore, rising 164% from ₹634 crore in the year-ago quarter, with EBITDA margin expanding to 21.5% from 15.1%, an improvement of 640 basis points. This performance reflects strong contributions from the company's downstream operations and strong demand, higher sulphuric acid prices and one-time gains. The copper business beat on demand, sulphuric acid prices and one-time gains, contributing significantly to the overall quarterly performance. Novelis, Hindalco's subsidiary, reported revenue of $5.942 billion in Q2 FY7, up 25% from $4.744 billion in the corresponding quarter last year, meeting ET Now estimates. Adjusted EBITDA increased 20% YoY to $508 million from $422 million, with adjusted EBITDA per tonne rising 23% to $553 from $448. However, shipments declined to 919 kilotonnes from 941 kilotonnes in Q2 FY6, though production at Novelis' Oswego plant had returned to normal levels and was meeting demand. Novelis continued to face tariff-related headwinds with 2Q seeing a $78 million impact led by an increase in Canadian shipments from Kingston to meet customer requirements at U.S. Oswego.
Hindalco shares opened at ₹947.90 and touched an intraday high of ₹960.70, trading at ₹959.85, up 0.72% or ₹6.85 following the Q2 results announcement. Buy orders accounted for 57.91% of total activity with traded volume of 47.20 lakh shares worth ₹444.28 crore. Despite the positive market response, three brokerages maintained buy ratings on the stock after the results, though two trimmed their target prices. Elara Securities kept the highest target at ₹1,227, implying a 28% upside from Thursday's close of ₹958, citing record copper EBITDA and expected improvement at Novelis as Bay Minette ramps up. Motilal Oswal retained a buy with a target of ₹1,180, raising FY27 estimates by 5% to account for the strong earnings beat, while flagging that second-half earnings for both India operations and Novelis are likely to remain subdued given lower LME aluminium prices and higher production costs. Axis Direct cut its target to ₹1,060 from ₹1,155, citing softer aluminium realisations and higher raw material cost assumptions, but maintained its buy call. The stock's 52-week range is ₹771.85 to ₹1,176, with the company's net debt-to-EBITDA ratio standing at 1.80x as of September 30, up from 1.23x a year ago as capital expenditure on growth projects accelerated.
