Hindalco Posts Strong Earnings on Favorable Metal Pricing

Hindalco Ltd posted strong earnings in its first quarter (1QFY27) due to favorable metal pricing, better domestic product mix, and higher by-product pricing. The company's consolidated net sales stood at INR848b (+32% YoY and +9% QoQ), exceeding the estimates of Motilal Oswal Financial Services Ltd.

The aluminum business saw a significant increase in upstream revenue to INR134b (+44% YoY) driven by favorable macros and stronger operational performance. The downstream EBITDA/t stood at USD303 (+15% YoY and 25% QoQ), led by a change in product mix and premiumization benefits.

The copper business revenues also saw an increase to INR172b (+16% YoY) due to higher average copper prices. However, the company's recent aluminum price reversal to USD3,200/t from a peak of USD3,850/t during the Middle East crisis is expected to soften earnings in 2H.