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Hindalco Industries Concall – February 2025 Updates
Strong ESG Performance
Hindalco Industries continues to lead in sustainability. The company ranked in the top 1% of the S&P Global Sustainability Yearbook 2025, securing the highest ESG score in the aluminum sector. Key highlights include:
- 79% of total waste was recycled and reused in the first nine months.
- 109% of bauxite residue and 101% of ash were successfully recycled.
- Six facilities received Zero Waste to Landfill certification.
- 16 out of 19 sites met Zero Liquid Discharge standards, improving water recycling efforts.
Impressive Financial Performance
Hindalco reported strong financial growth in the last quarter:
- Consolidated EBITDA rose 28% year-on-year to ₹8,100 crores.
- Net profit after tax increased 60% year-on-year to ₹3,735 crores.
- The Indian aluminum business saw exceptional growth:
- EBITDA surged 69% YoY to ₹4,776 crores.
- Net profit soared 134% YoY to ₹2,885 crores.
- Novelis shipments declined 1% YoY to 904 Kt due to high aluminum scrap prices, leading to a 19% drop in EBITDA to $367 million.
Operational Highlights
- Indian aluminum business EBITDA recorded a 73% YoY jump to ₹4,222 crores, helped by lower input costs.
- Aluminum downstream shipments increased 10% YoY to 99 Kt.
- Copper business showed steady growth:
- Metal shipments stood at 120 Kt.
- Copper EBITDA climbed 18% YoY to ₹777 crores.
Market Outlook
- Global GDP growth is projected to be 3.3% for FY ’25 and ’26.
- India’s economic growth slowed to 6% in H1 FY ’25, but it is expected to improve in the second half, driven by festive demand.
- Aluminum demand in India is estimated at 1,403 Kt, reflecting an 11% YoY growth, mainly driven by electrical and packaging sectors.
Strategic Developments
Hindalco continues to strengthen its long-term strategy:
- Meenakshi coal mine acquisition ensures better coal pricing and long-term supply security.
- Aditya FRP project will increase downstream capacity to 600 Kt per annum by June 2025.
- New copper inner grooved tube plant is set to launch this month.
Challenges & Management Insights
- GHG emissions rose due to higher power consumption at smelters, but efficiency improvements are in progress.
- Novelis margins are under pressure due to high aluminum scrap prices. The company is working on cost control measures.
- Copper EBITDA for next year is expected at ₹600 crores per quarter, slightly lower than current levels due to anticipated TC/RC reductions.
Commodity Pricing & Hedging
- For Q4 FY ’25, 35% of aluminum is hedged at $2,600 per ton, with 15% under a zero collar.
- Copper EBITDA projections indicate a cautious approach due to TC/RC price fluctuations.
Despite market fluctuations, Hindalco remains optimistic. With strong operational efficiency, strategic expansions, and sustainability efforts, the company is well-positioned for steady growth in the coming quarters.
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