Hindalco Limited-Research Report

Hindalco Industries Ltd., incorporated in 1958 is a flagship company of the Aditya Birla Group. The Co and its subsidiaries are primarily engaged in the production of Aluminium, Specialty Aluminium and Copper.  It is Largest fully integrated Aluminium manufacturing company in India, One of Asia's largest* producers of primary Aluminium (*excluding China), One of the largest custom copper smelters at a single location in Asia and Third largest manufacturer of copper cathode rods outside of China.

Through its various products company serves various industries such as its diverse copper products like copper rods, speciality alloy rods, wires, cathodes, copper tubes and foils are used in wide range of industries from mobility solutions, consumer durables, and power generation and electrical equipment. Its diverse aluminium downstream offerings–extrusions, flat-rolled products, wire rods, foil, billets etc.–find applications in wide range of industries from packaging to aerospace. Company’s brand portfolio includes Hindalco PrizTec, Hindalco ecoedgeG, Hindalco ecoedgeC, Hindalco Everlast, Eternia, Freshwrap, Fusalox and Totalis.

Company operates 20 plants and 23 bauxite and coal mines in India, and 32 overseas plants under Novelis, 14 of which include recycling facilities. Its Alumina refineries are located in Belagavi and Muri and its Aluminium Smelting facilities are located at Hirakud, Mahan and Aditya Aluminium. Its Aluminium Downstream operations are undertaken at Alupuram, Belur, Hirakud FRP, Kuppam, Renukoot, Silvasa, Taloja and Mouda and its copper smelters are located at Asoj and Dahej. 

Production Capacity (in MnT):

Alumina: 3.74

Specialty Alumina: 0.46

Primary Aluminium: 1.34

Aluminium VAP: 0.43

Copper Cathode: 0.42

Copper Rods: 0.54

Novelis Aluminum Rolling: 4.2

 

In 2022, Hindalco achieved a significant milestone by launching India’s first aluminium freight rake. These advanced wagons are three tonnes lighter than traditional steel counterparts, offering over 5% additional payload capacity, enhanced energy efficiency, and a 40% reduction in maintenance costs. This breakthrough marks a transformative step for Indian Railways and underscores Hindalco’s commitment to building a greener, more efficient future.

Company’s subsidiary Novelis is the leading producer of flat-rolled aluminum products and the world’s largest recycler of aluminum. It offers solutions to diverse industries, including beverage cans, automobiles, aerospace, and specialty markets such as foil packaging, transportation products, etc. The segment reported a total shipment of 2,800 KT in 9M FY25 vs 2,722 KT in 9M FY24.

Under its Copper business segment company produces copper cathodes, and continuous cast copper rods in various sizes for industries like automotive, consumer durables, electrical equipment, etc. It is one of the largest manufacturers of copper cathode rods (excluding China) and it operates one of Asia’s largest custom copper smelters at a single location with a captive jetty in Dahej, Gujarat. Company reported Metal sales of 356 KT in 9M FY25 vs 371 KT in 9M FY24 and CC Rods sales of 285 KT in 9M FY25 vs 291 KT in 9M FY24.

Under Aluminium business segment company is the world’s largest aluminum company by revenues and ranks among the global top 5 aluminum producers based on shipments. It operates across the value chain, from bauxite mining, alumina refining, coal mining, captive power plants, and aluminum smelting to downstream rolling, extrusions, and foils. Company reported Upstream sales of 995 KT in 9M FY25 vs 1,008 KT in 9M FY24 and Downstream sales of 298 KT in 9M FY25 vs 265 KT in 9M FY24.

Under its Specialty Alumina Business company also manufactures Calcined alumina used in grinding media, wear-resistant ceramic components, etc., and Alumina hydrates used to manufacture water treatment chemicals like aluminum sulfate, zeolite, etc. 

On expansion front in Q3 FY25, Novelis operationalized a 100 KT recycling facility in Ulsan, South Korea. It has also invested $4.1 Bn in a 600 KT greenfield rolling and recycling plant in Bay Minette, US, and is expected to be commissioned in Q2 CY26. It is also expanding UBC recycling and casting in Latchford, UK, for $90 Mn and allocating $330 Mn for debottlenecking in Oswego, Logan, and Pinda. Under the Aluminum and Copper business company is developing an 850 KT Aditya alumina refinery in Odisha for Rs. 7,500-8,000 Cr, increasing its downstream capacity to 600 KTPA. It is also setting up a 50 KT copper recycling plant in Gujarat for Rs. 2,700 Cr. Both investments will be incurred in FY26-FY27. It has also planned to commission a 25 KT copper inner grooved tube plant in 2025.

The company has a total renewable capacity of 189 MW and It intends to achieve a renewable capacity of 300 MW by FY25, including 100 MW solar power capacity with hybrid storage.  

Hindalco is playing a key role in advancing the global transition toward sustainable transportation. With a strong focus on innovation, the company has positioned itself as a comprehensive solutions provider for electric vehicle (EV) manufacturing. Its wide-ranging portfolio includes aluminium battery enclosures, motor housings, bus bars, battery materials, and various auto components — all contributing to the evolution of clean mobility.

Fundamentals:

CMP	Rs. 623
52 - week high / low	Rs. 773 / 546
Dividend % (consolidated)	0.56%
ROE	10.2%
BV(Rs.)	513
Sales (Rs.)	2,29,600 cr.
Debt to Equity	0.53
P/E ratio	9.76
EPS (consolidated)	61.8
P/B ratio	1.23
Market Cap	Rs. 1,41,362 Cr.
Face value	Rs. 1
PEG Ratio	0.67

 

Financial Results:

In Q3Fy25 Hindalco reported 11% jump in Revenue and it reached Rs. 58390, its EBITDA reached Rs. 8108Cr. with 28% jump and its PAT reached Rs. 3735Cr. marking 60% compared to previous year in same period.

On segmental front, Novelis recorded Shipments at 904 KT, down by 1% but its Revenue was at $4.1 billion, up by 4%, driven by higher average aluminium prices. Adjusted EBITDA was at $367 million, down by 19% due to higher aluminum scrap prices and unfavourable product mix. Company’s Net Income was at $110 million, down by 9%.

Its Aluminium (India) business’s Quarterly Upstream revenue was at Rs 9,993 crore, up 25% with EBITDA at Rs 4,222 crore, up by 73%. Its Aluminium Upstream EBITDA per tonne was at $1,480, up 68%, with industry-best margins of 42%. Its Downstream revenue at Rs 3,195 crore, up 25% and EBITDA stood at Rs 150 crore, up 36%. Sales of Downstream Aluminium was at 99 KT, up 10% and its Downstream EBITDA per tonne was at $179, up 22%.

Under its Copper (India) business company recorded Revenue at Rs 13,732 crore, up 15% and EBITDA at Rs 777 crore, up 18%. Its Copper metal sales was at 120 KT, up 1% and Copper Continuous Cast Rod (CCR) sales was at 95 KT, up 1%.

Latest Updates:

1. Hindalco Industries Ltd. recently achieved a significant milestone with the allocation of the Meenakshi Coal Mine in Odisha through a vesting order by the Ministry of Coal. The Meenakshi coal mine, located in Odisha, is a fully explored block with a Peak Rated Capacity (PRC) of 12 million tonnes per annum and approximately 285.23 million tonnes of geological reserves. With a favourable coal-to-waste stripping ratio of less than 1, the G12 grade mine is poised to be a cost-effective and sustainable energy source for company’s operations, making the company self-reliant in coal production.
2. Recently the company has emerged as the World's Most Sustainable Aluminium Company for the fifth consecutive year in the 2024 edition of the S&P Global  Corporate Sustainability Assessment (CSA) rankings. Hindalco, the only  Aluminium company to secure the top position in the S&P Global CSA , achieved a total score of 87 points (as of 30 October 2024), thereby improving its tally by 9  points from the last year, and is 22  points ahead of its closest peer.
3. Company also plans to significantly expand its manufacturing capacity of fine quality aluminium foil that is used in rechargeable batteries to serve the rapidly growing market for electric vehicles (EVs) and energy storage systems. The company is investing Rs.800 crore to build a new plant near Sambalpur in Odisha that will initially produce 25,000 tonnes of the resilient product which forms the backbone of Lithium-ion and Sodium-ion cells. By 2030, demand for battery grade aluminium foil in India is expected to grow manifold to 40,000 tonnes, primarily driven by mushrooming growth in gigafactories for advanced cell manufacturing.
4. Recently company has signed a technology partnership with Italy-based Metra SpA renowned for its expertise in producing structured and value-added aluminium extrusions. The partnership aims to enable the production of large-size aluminium extrusion and fabrication technology for building high-speed aluminium rail coaches in India. The collaboration marks a pivotal move to bring world class technology – currently limited to Europe, China, Japan and a few other countries – to India. The tie-up provides Hindalco the launching pad to drive the ambitious upgradation programme of Indian Railways that runs the world's largest rail network.
5. The Odisha Mining Corporation (OMC) and Hindalco Industries Limited have signned a Memorandum of Understanding (MoU) for the Long-Term Linkage of Raw Material for Hindalco Alumina Refinery at Kanshariguda, Rayagada. Some of the key highlights of this refinery are Establishment of an Alumina Refinery manufacturing unit with a production capacity of 2.0 million TPA, Introduction of a co-generation thermal power plant of 150 MW, environmentally conscious ore transportation through a fully covered closed conveyor- LDC and a projected investment of approx. Rs.8,000.00 crores.
6. Hindalco Industries Ltd and Texmaco Rail & Engineering Ltd. have entered into a strategic alliance to develop and manufacture world-class aluminium rail wagons and coaches that will help Indian Railways achieve its emission goals and bolster operating efficiency. Indian Railways has launched "Mission 3000 MT" with a target of doubling freight capacity to reach 3,000 million tonnes by 2027 through augmentation of rolling stock, with the objective of achieving 45 per cent market share in freight.
7. Hindalco Industries Ltd. recently unveiled a bold new brand identity, marking its transformation from a materials supplier to an engineered solutions provider. The refreshed identity underscores its role as a co-creator and problem solver, shaping the future of industries such as electric mobility, renewable energy, energy storage, semiconductors, and high-end electronics. The company Plans to invest Rs 45,000 crore for the next generation high precision engineered products.

Hindalco Industries continues to affirm its position as a key player in the global aluminium and copper markets, with strong fundamentals and forward-looking strategies that align with both cyclical recovery and long-term structural growth. The company's stellar FY2024 performance—highlighted by a 78% YoY jump in consolidated net profit and robust EBITDA margins—reinforces its operational resilience amid a volatile macro environment.

From an investor’s standpoint, Hindalco’s strategic capex of ₹45,000 crore signals a clear growth runway across its India aluminium operations and downstream value-added segments. The company's increased focus on sectors like EVs, renewables, and aerospace not only reflects evolving global demand trends but also positions Hindalco to benefit from premium product pricing and margin stability.

Furthermore, Hindalco’s consistent top-tier ESG rankings and strong free cash flow generation enhance its appeal to institutional investors looking for sustainability-aligned value plays. While input cost pressures and global demand cycles pose near-term risks, the company’s diversification—both geographically and product-wise—offers a buffer against macro shocks.

In summary, Hindalco presents a compelling investment case for long-term portfolio holders seeking exposure to metals, with strong fundamentals, expansion-led growth, and a future-ready business model.

 

HET ZAVERI

info@smartinvestment.in

 

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