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Informist, Saturday, Aug. 9, 2025

 

By Narayana Krishna

 

Hyderabad – Hindalco Industries Ltd. is expected to report a strong year-on-year performance for the June quarter, supported by healthy growth in its domestic aluminium business and higher copper prices, analysts said. However, weakness in global commodity prices and the adverse impact of tariffs on its US subsidiary Novelis Inc. may weigh on overall profitability on a quarter-on-quarter basis, according to analysts.

 

While the India business is likely to show a year-on-year improvement in sales, driven by strong performance in the aluminium segment, earnings on a sequential basis may have come under pressure due to lower realisations and soft volumes in the copper division, analysts said. Novelis' performance, in particular, is anticipated to reflect a decline, with both earnings and margins affected by external headwinds and tariffs by the US, according to analysts.

 

The Aditya Birla group's flagship metal company is expected to report a 16% year-on-year growth in its consolidated net profit to INR 35.7 billion, according to an average of estimates from seven brokerages. The estimates for net profit range from INR 29.6 billion by Prabhudas Lilladher Pvt. Ltd. to INR 47.4 billion by Nuvama Wealth Management Ltd.

 

The company's consolidated revenue for the quarter is seen rising 6% year-on-year to INR 604.1 billion. Systematix Shares and Stocks (India) Ltd. has the highest revenue estimate at INR 639 billion, while Kotak Institutional Equities has the lowest at INR 576 billion.

 

From the trailing quarter, the bottom line is seen falling 32% and the top line declining 7%, the estimates show. Hindalco Industries will declare its Apr–Jun earnings on Tuesday.

 

TARIFF HIT

Besides weak pricing, new tariffs in the US are likely to hurt Hindalco's arm Novelis in the June quarter, analysts said. The US subsidiary imports aluminium and raw materials from Canada. Novelis accounts for nearly 60% of Hindalco Industries' consolidated sales.

 

The company's consolidated earnings before interest, tax, depreciation, and amortisation are expected to weaken on a quarter-on-quarter basis, primarily due to a decline in prices and weaker earnings at Novelis largely because of the impact of tariffs, Kotak said.

 

"We estimate Novelis' EBITDA at $437 million, reflecting a 12.7?cline on a year-on-year basis and a 7.7?cline on a quarter-on-quarter basis," Kotak said.

 

Nuvama Wealth and Prabhudas Lilladher expect Novelis' June quarter EBITDA per tonne at $450, down 14% year-on-year and 9% quarter-on-quarter, mainly due to the adverse impact of tariffs in the US. Systematix expects it at $440 per tonne due to narrow scrap spreads.

 

INDIA SHOW

According to Kotak, Hindalco's India operations' EBITDA is likely at INR 45.3 billion, showing a 23% increase year-on-year but a 15?cline quarter-on-quarter. Within this, aluminium EBITDA is estimated at INR 39.3 billion, up 36% year-on-year but down 17% quarter-on-quarter, primarily due to lower aluminium prices.

 

Copper segment EBITDA is estimated at INR 6 billion, down 25% year-on-year and 2% quarter-on-quarter, owing to lower volumes and a high base in the previous quarter, Kotak said.

 

According to Nuvama Wealth, Hindalco's India EBITDA is expected to decline 17% quarter-on-quarter to around INR 44 billion. Aluminium EBITDA, including contributions from its wholly owned arm Utkal Alumina International Ltd., is likely to fall 21% sequentially to INR 40.7 billion, mainly due to a 7% drop in aluminium prices and a 5?cline in volumes. Copper EBITDA is expected to remain broadly stable, with a marginal 1?cline quarter-on-quarter at INR 6 billion.

 

Prabhudas Lilladher projects Hindalco's June quarter consolidated EBITDA margin to see a 201-basis-point year-on-year and a 247-basis-point sequential decline to 11.1% for June quarter. The average of estimates from six brokerages for the company's EBITDA is pegged at INR 73.9 billion.

 

Analysts are closely watching for the company's commentary on the status of various capex plans in India, along with pricing and margin trends for Novelis.

 

Of the 15 brokerage reports on the company available with Informist, 13 have a 'buy' rating with an average target price of INR 770; one brokerage has a 'hold' rating with a target price of INR 738 and one with 'sell' with a price of INR 650 per share. On Friday, shares of Hindalco Industries ended at INR 672.75 on the National Stock Exchange, down over 1% from its previous close.

 

Following are the Apr-Jun earnings estimates for Hindalco Industries Ltd. based on reports from seven brokerage firms in the descending order by the estimate of net profit:

 

Brokerage name	Net Sales	Net Profit	EBITDA
	--in million rupees--
Nuvama Wealth Management Ltd	601,787	47,414	82,665
Anand Rathi Share and Stock Brokers Ltd	596,660	37,697	--
Kotak Institutional Equities	576,041	36,948	79,914
Motilal Oswal Financial Services Ltd	607,600	34,300	72,500
Systematix Shares and Stocks (India) Ltd	639,000	32,600	74,200
YES Securities (India) Ltd	616,760	31,450	68,267
Prabhudas Lilladher Pvt Ltd	591,200	29,600	65,900
Average	604,150	35,716	73,908

 

 

End

 

Edited by Akul Nishant Akhoury

 

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