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Informist, Friday, Aug. 7, 2026

 

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--Hindalco: Will make sure cost of bauxite for co is in the first quartile
--CONTEXT: Comments by Hindalco's mgmt in post-earnings press conference
--Hindalco: Net debt up Q1 on high working capital in Novelis and copper ops
--Hindalco: See LME aluminium price avg $3,200 per tonne in Jul-Sept
--Hindalco: Domestic aluminium, copper demand up 7-8%
--Hindalco: To utilise more aluminium, copper scrap in India
--Hindalco: Continue to expand upstream, downstream operations
--Hindalco: Co's costs to peak in Jul-Sept, will fall afterwards 
--Hindalco: See strong demand in specialty, aero, cans in Europe

 

MUMBAI/NEW DELHI – Hindalco Industries Ltd. expects its costs to peak in the September quarter, rising 4-5% from the June quarter, due to the increase in cost of gas and furnace oil, Managing Director Satish Pai told a post-earnings press conference Friday. After this quarter, Hindalco's costs should gradually fall, he said. The company also has the advantage of some lower cost inventories, which could cap the rise in costs, he said.

 

Hindalco's net debt for the June quarter rose due to the high working capital block at US subsidiary Novelis Inc. and its copper operations in India, Pai said. The company's net debt rose to INR 774.95 billion as of Jun. 30 from INR 648.41 billion as of Mar. 31. "...This (Apr-Jun) was a very high copper working capital block and the inventory in Novelis was on the higher side because this is... (the) last quarter of the Oswego (disruptions). Oswego now we pick up from August onwards...," Pai said, adding that the peak debt could touch INR 800 billion. "Now as inventories go down, then net debt will start to go down on the absolute level," he said.

 

Of the INR 120 billion capital expenditure announced for the financial year 2026-27 (Apr-Mar), the company is spending a good chunk on the new copper smelter and copper wire rod plant. It is also going to expand smelting operations and refining and rolling, Pai said. The company is continuing the expansion of its upstream operations and will also expand the downstream segment.

 

Domestic demand for both aluminium and copper is growing at around 7-8% for FY27. Hindalco's current strategy for the domestic operations will be to use more scrap for aluminium and copper. "...We are focused on trying to point out that you cannot just keep importing scrap because European Union is going to put restrictions," Pai said. "Because everybody wants to keep the scrap in their own country... so I think that the big change that will happen, which we have been actively advocating, is for more recycling to happen in the country." Hindalco is working with local suppliers to source scrap for its aluminium recycling plant in Lapanga, Odisha.

 

Pai said half of the company's scrap usage currently relies on imports and the other half comes from the domestic market. He sees over 60% of total copper scrap usage to be from the domestic market. However, it will take some time to increase the volumes of aluminium scrap. He added that it would take at least three years to lower the import reliance below 50% for aluminium scrap, but it will happen sooner for copper. "...The copper scrap which we are talking about includes electronic waste as well as copper scrap," the managing director said. "And there is a lot of electronic waste available in India. So, I think copper will probably be 60-70% domestic within 2 years."

 

Pai expects aluminium prices on the London Metal Exchange to average $3,200 per tonne for the September quarter and $3,200-$3,400 per tonne for the year. Global aluminium inventories are tight and at all-time lows. Pai said the company will be more prudent on costs from now and "make sure" the cost of bauxite, which determines the cost of alumina, will be in the first quartile of the cost curve.

 

While the automotive sector demand is sluggish in Europe, Hindalco sees firm demand for specialty, aeronautics, and cans there. Asked if a free trade agreement between India and the European Union would increase opportunities for the company, Pai said that unless the deal sorts out issues related to the EU carbon border adjustment mechanism, "it makes no difference".

 

Hindalco reported a consolidated net profit of INR 70.13 billion for the June quarter, up 75% on year, and well above the Street's estimate of INR 58.17 billion. The company's consolidated revenue increased 32% to INR 848.25 billion, but it still missed analysts' estimate of INR 889.70 billion. The company declared the June quarter results during market hours Friday. Its shares ended at INR 1,059.60 on the National Stock Exchange, up 3.2% from Thursday.  End

 

US$1 = INR 95.21

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati and Astha Oriel

Edited by Rajeev Pai

 

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