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Informist, Tuesday, Oct. 28, 2025

 

By Rajesh Gajra

 

NEW DELHI - The growth in the bottom line of Hindalco Industries Ltd. for the September quarter will likely be strongly supported by domestic aluminium sales and prices, but it will also be weighed down significantly by the lack of operating leverage in the operations of its US-based subsidiary, Novelis Inc. The expected decline in operating profit of the Indian copper segment will also negatively affect Hindalco's year-on-year earnings performance, according to analysts.

 

Hindalco, the flagship metals company of the Aditya Birla group, is expected to post a consolidated net profit of INR 45.4 billion for the September quarter, up 2.6% on year and 13% on quarter, according to the average of estimates from nine brokerages. The estimates range from INR 36.4 billion by Motilal Oswal Financial Services to INR 52.7 billion by brokerage Prabhudas Lilladher. Analysts' expectations for Hindalco's September quarter bottom-line growth are muted, as the company reported a strong 30% on-year rise in consolidated net profit in the trailing quarter to INR 40 billion.

 

Analysts expect Hindalco's revenues to rise 14% on year and 3.4% on quarter to INR 664.2 billion. The lowest revenue estimate is INR 637.4 billion by Motilal Oswal Financial Services and the highest is INR 690.5 billion by Prabhudas Lilladher. In the trailing quarter, Hindalco reported a revenue growth of 13% on year to INR 642.3 billion.

 

"Volume growth at India operations and higher base metal prices to drive consolidated performance (of Hindalco) during the quarter, helping offset negative impact of tariffs and narrower spreads at Novelis," Systematix Shares and Stocks (India) said in a report. The brokerage said headwinds at Novelis will moderate the overall growth for Hindalco "despite commodity price tailwinds."

 

Higher aluminium and copper prices will support on-year growth in Hindalco's consolidated revenue for the September quarter, "but weak Novelis' volume could offset earnings," brokerage Motilal Oswal said. The brokerage expects Hindalco's India operations to post "healthy earnings over better volume and prices."

 

Hindalco's India aluminium sales volume on year growth is expected to be in the low single digit and the sales volume of Novelis is expected to be flat or marginally rise by 1-2% on year. The company's copper sales volume is expected to increase 6% on year, according to Nuvama Wealth Management.

 

The company is seen reporting a consolidated earnings before interest, tax, depreciation, and amortisation of INR 86 billion for the September quarter, according to the average of estimates by eight brokerages. Analysts' expectations for Hindalco's consolidated EBITDA vary widely, from a 5.3?cline on year by Motilal Oswal to a 14.8% rise on year by Prabhudas Lilladher. Hindalco's EBITDA margin for the September quarter is seen contracting over the year-ago quarter by most analysts.

 

In the case of Novelis, analysts are unanimous in their expectations of a weakening EBITDA. Novelis' EBITDA will likely fall 10.3% on year and its EBITDA per tonne will fall 12% on year "due to continuing impact of tariffs in the US," Kotak Securities said in a report. Nuvama expects an 11?ll in Novelis' EBITDA per tonne.

 

Hindalco's India EBITDA is expected to go up sharply by 23% on year, according to Kotak Securities. Nuvama expects the company's India aluminium segment's EBITDA per tonne to rise 22.6% on year. However, in Hindalco's copper segment, the brokerage expects the EBITDA per tonne to fall substantially by 29% on year. The company management had said earlier that the copper segment EBITDA had been badly hit in the June quarter, mainly due to a steep decline in treatment and refining charges. It had said this scenario would continue in the September quarter as well.

 

The company will detail its earnings on Nov. 7. Investors will watch for the guidance on EBITDA per tonne for Novelis, according to Systematix. Management updates on the timeline of various capital expenditure projects will be crucial, according to brokerage Motilal Oswal. Analysts will also await management's comments on the disruption to Novelis' hot mill operations in Oswego, New York, following a fire. The company had said on Oct. 24 that it would restart the operations at the affected unit of Novelis by the end of December.

 

On Tuesday, the company's shares ended at INR 848.95 on the National Stock Exchange, up 1% from the previous close. The stock has risen about 27% since the company announced its June quarter earnings. Of the 15 brokerage reports on the company available with Informist, 12 have a 'buy' call on the stock, with an average target price of INR 764, and 3 have a 'hold' recommendation.

 

Following are the September quarter earnings estimates for Hindalco from nine broking firms in descending order of estimates of net profit:

 

Brokerage	Net sales	Net profit	EBITDA
	(In INR million)
Prabhudas Lilladher Pvt. Ltd.	690,500	52,700	90,500
Systematix Shares and Stocks (India) Ltd.	678,500	48,200	88,300
Emkay Global Financial Services Ltd.	665,077	46,619	91,453
Kotak Securities Ltd.	657,116	46,476	85,977
Nuvama Wealth Management Ltd.	656,036	45,650	88,122
Anand Rathi Share and Stock Brokers Ltd.	674,555	45,277	---
JM Financial Institutional Securities Pvt. Ltd.	650,000	45,000	86,000
YES Securities (India) Ltd.	668,945	42,004	82,661
Motilal Oswal Financial Services Ltd.	637,385	36,371	74,636
Average	664,235	45,366	85,956

 

End

 

 

Edited by Saji George Titus

 

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