Hindalco Preview: Q2 net profit likely to jump 21% YoY, Indian operations anticipate strong sales

The consolidated revenues are likely at Rs 53,558.60 crore, down 5 percent from Rs 56,176 crore a year ago.

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26 Aug, 2025 12:21

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Hindalco Industries expects double-digit YoY growth in Q2 consolidated net profit, despite weak earnings from the US unit, Novelis, which contributes two-thirds of group revenue. Indian operations anticipate strong sales and margin growth, analysts said. Results will be declared on November 10.

According to a poll of brokerages conducted by Moneycontrol.com, consolidated PAT for the quarter is expected to be around Rs 2,668.10 crore, up 21 percent year on year and 9 percent higher quarter on quarter. The consolidated revenues are likely at Rs 53,558.60 crore, down 5 percent from Rs 56,176 crore a year ago. EBITDA is likely to be at Rs 6,007.50 crore, up 12 percent YoY and 5.1 percent sequentially.

Analysts project increased domestic sales volumes for Hindalco in copper and aluminum. The accumulation of lower-cost coal inventory and captive mines may enhance margins. Additionally, higher treatment and refining charges in the copper business are expected to boost overall performance.

"On India-business, the impact of lower LME prices is likely to be offset by lower cost. Copper division's performance is likely to stay firm on the back of higher by-product prices and value-added sales", said ICICI Direct in its latest note. Brokerage firm Nuvama said in its report that Hindalco will witness cost improvement of 5 percent QoQ amid improved coal linkage.

PhilipCapital anticipates a 2 percent quarter-on-quarter decline in aluminum volumes for the upcoming quarter, with a corresponding 5 percent decrease in aluminum LME. On the other hand, copper volumes are expected to show a 10 percent quarter-on-quarter improvement.

On 8 November, Hindalco's arm Novelis exceeded its EBITDA target, hitting $519 per tonne two quarters ahead of schedule due to sharp increase in volumes. This subsidiary contributes over 70 percent of Hindalco's EBITDA.

In the July-September quarter, Novelis saw a 14 percent drop in net sales and net profit from continuing operations, totalling $4.1 billion and $157 million. The on-year decline in revenue was due to lower FRP dispatches, lower metal prices which was partially offset by higher automotive shipments, favourable product mix, and increased product pricing. EBITDA also fell slightly to $484 million from $506 million last year but was up from $421 million in the previous quarter.

The company's volumes improved by 6 percent due to the end of destocking, driven by operational efficiencies and better metal prices. Novelis remains cautious about the specialty segment due to the uncertain macro environment.

According to analysts, Novelis beverage can destocking is almost done. The US market is strong and South America strengthens in summer. Europe, Mexico, and SE Asia, on the other hand, remain weak. The automotive segment shows stable demand, with no impact from UAW strike. The specialty segment is pressured by higher interest rates in the B & C segment.

Aerospace is seeing strong demand for fleet replacement. Long-term demand drivers are intact. Can destock is near completion, Capex for Bay Minette project has started, increasing shipment visibility. Analysts revise EBITDA slightly up for FY24/FY25 post-Q2FY24 Novelis results.

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