Hindalco Industries shares closed at Rs.957.70 on Friday, up 1.88% on the BSE, after the company reported a strong performance for the September quarter of FY27. The stock has gained 21.53% over the past year, though it remains down 6.71% over three months and 8.47% over six months. Consolidated net profit surged 58.8% year-on-year to Rs.7,533 crore, while consolidated income rose to Rs.92,651 crore from Rs.66,771 crore in the same period last year. EBITDA increased 42% year-on-year to Rs.13,757 crore, driven by strong contributions across its business segments.
The company attributed its record performance to its integrated business model, with significant contributions from its copper and aluminium businesses. Novelis, a subsidiary, sustained improved performance due to the normalisation of operations at its Oswego facility. However, Hindalco warned that aluminium production costs in India are expected to remain elevated in the December quarter due to high coal costs, though costs are expected to moderate in the March quarter as coal availability improves.
Managing director Satish Pai noted that coal prices in northern India remained high in October, keeping input costs under pressure. He highlighted continued tightness in domestic coal supplies, with inventories at some plants around 50% of normal levels. The company expects cost pressures to ease in Q4 as coal availability improves with the onset of winter and reduced power demand in northern India.
Brokerage Nuvama Institutional Equities upgraded Hindalco to 'BUY' and raised its target price to Rs.1,184 from Rs.1,108. The brokerage noted that Hindalco has hedged 26% of its estimated FY28 aluminium volumes at $3,168 per tonne, providing a cushion against potential downside in aluminium prices. Nuvama also expects Novelis' earnings and cash flows to improve from Q4FY27 onwards and raised its FY27 and FY28 EBITDA estimates by 4-5%, factoring in higher copper profits.