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Informist, Tuesday, Aug. 12, 2025

--Hindalco: No impact of US tariff on India business Q1 

--CONTEXT: Hindalco Industries mgmt comments in post-earnings press call 

--Hindalco: See aluminum, copper demand strong over next 10 years 

--Hindalco: Aluminium upstream volume dn 1% YoY in Q1 on inventory build-up 

By Pallavi Singhal and Rajesh Gajra

NEW DELHI - Hindalco Industries Ltd.'s downstream aluminium volumes rose 6% on year in Apr-Jun, driven by strong demand in the electrical sector, industrial sector, and packaging, the company's management said in a post-earnings press call Tuesday. Its

upstream aluminium shipments, however, fell 1% on year due to inventory build-up and logistics issues, but are expected to recover in the second quarter, it said. According to the management, an inventory build up due to logistics issues at Hindalco's new Aditya Flat Rolled Products plant in Odisha led to this fall. 

Shedding colour on its downstream business, the company said demand in Indian market in the June quarter was "extremely strong", particularly in the electrical sector, which saw double-digit growth driven by long-distance conductors, cables, and wires. The industrial sector, including white goods, also performed well, the management said. It added that demand from auto sector has also picked up on a sequential basis.

Packaging demand has also been robust, driven by anti-dumping measures on Chinese foil and foil stock, they said. As the company heads into the festive season, the management foresees strong demand across most end-use sectors.  

According to the management, the company's copper shipments were up 4% on year but earnings before interest, tax, depreciation and amortisation or EBITDA fell 16% due to a decline in the treatment and refining charges of the red metal. Hindalco's copper EBITDA decreased due to a 70% drop in treatment and refining charges compared to the same quarter last year, the management said.

Despite an increase in copper sales and strong sulfuric acid prices, the decline in treatment and refining margins led to the EBITDA drop. "As a custom smelter, Hindalco's profit comes from conversion and refining margins, not from the higher copper prices," they explained. A custom smelter is a company that processes raw materials, such as copper concentrates, for other companies or clients and takes a fee from its clients for providing these services. Treatment and refining charges are set through negotiations between major copper miners and smelters, particularly in China, which is the world's dominant processor of copper.

The company's management sees strong demand in India, particularly in electrical sector, industrial sector, and packaging on the back of festival season. It also does not see US tariffs hurting its India business. "There is no impact on India sales as most of them are either sold domestically, or mostly to Southeast Asia and Far East customers. So on the India side, we actually did not see any impact at all," they said. 

The company also expects its sales to rise on the back of high demand it foresees for the next 10 years. "Our view is that over the next 10 years, the demand for aluminium and copper is going to be very strong... regardless of any short-term macroeconomic, geopolitical things," they said. 

Earlier in the day, the company reported strong earnings, with its consolidated net profit at INR 40.04 billion for Apr-Jun, up 30.25% on year. Its revenue for the quarter was up 12.66% on year at INR 642.32 billion. Hindalco's June quarter earnings were above the analysts' estimates both in terms of net profit and revenue.

The company's India operations drove the overall growth, even as US subsidiary Novelis reported a fall in numbers due to higher scrap prices and tariffs. Novelis contributes about 60% of Hindalco Industries' consolidated sales.  

On Tuesday, shares of Hindalco Industries ended at INR 667.05 on the National Stock Exchange, down 0.8% from the previous close. End

Edited by Vandana Hingorani

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