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Informist, Thursday, Feb. 12, 2026

 

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--Hindalco: To add 103 MW renewable energy capacity Q4; FY26 capacity 522 MW 
--CONTEXT:Hindalco management's comments in post-earnings call with analysts 
--Hindalco: India Q3 aluminium demand seen at 1.5 mln tn, up 9% YoY 
--Hindalco: Specialty alumina ops expected to be commissioned in Apr-Jun 
--Hindalco: Q3 net debt increase mainly on rise in commodity prices 
--Hindalco: Will reverse rise in working capital for copper in Q4 
--Hindalco: Substituting copper with aluminium in operations where possible 
--Hindalco: See Novelis gross debt near $8 bln FY27 after rising short-term 
--Hindalco: See India ops FY27 capex at INR 100 bln-INR 120 bln 
--Hindalco: See Q4 alumina sales at 170,000-180,000 tonnes 
--Hindalco: See impact of Oswego fire on Novelis Q4 volumes similar to Q3 

 

By Ashutosh Pati and Ruchira Kagita

 

MUMBAI – Hindalco Industries Ltd. expects to incur capital expenditure of INR 100 billion-INR 120 billion for its India operations in the financial year 2026-27 (Apr-Mar), its management told analysts in a post-earnings conference call Thursday. For FY26, Hindalco expects the capital expenditure to be around INR 100 billion, including INR 20 billion paid to acquire the Bandha coal block in Madhya Pradesh. For the nine months ended Dec. 31, the company incurred a capital expenditure of around INR 60 billion.

 

Hindalco expects the March quarter to be a good one on account of strong demand for aluminium and copper. It expects alumina sales to rise to around 170,000-180,000 tonnes from around 160,000 tonnes in the December quarter, the management said.

 

The company reported a sharp rise in net debt in its India operations for the December quarter, which it attributed to a rise in prices of commodities such as aluminium and copper. However, it is confident of reversing the rise in working capital for copper in the current quarter, the management said.

 

"In the India business, the net debt increased by around 7,000 crores (INR 70 billion), which was coming really from the copper business... because of the increase in the LME (London Metal Exchange price of copper), as well as some increase in stock because of the (copper) concentrate arrival," the management said. "But in Q4, we are confident of liquidating or reversing that part of the copper increase... so, largely working capital requirements for copper concentrate in India will reverse in Q4."

 

The company has been substituting copper with aluminium for the last two years, wherever possible. "...long-distance conductor cables, many wiring systems, have been switching to aluminium, but it's not in the last quarter," the management said. "But of course, there are certain applications where copper still holds and that's why if you look at electrification, you look at electric vehicles, motors, harnesses, there the copper demand remains extremely strong."
 

The company reported a consolidated net profit of INR 20.49 billion for the December quarter, down 45% on year and sharply below analysts' expectation of INR 42.45 billion. This was because of a one-time cost of INR 26.10 billion incurred due to the fires at its US subsidiary Novelis's plant in Oswego County, New York. However, its consolidated revenue rose around 14% on year to INR 665.21 billion.

 

As of Dec. 30, the company had a consolidated net debt-to-EBITDA level of 1.73. It expects to maintain this around 2 for the next two years. Hindalco's cost of production is expected to rise by a percent in the current quarter, mainly because of higher prices of calcined petroleum coke, the management said. "...the India capex (capital expenditure), the projects that we have, you know very well, we are going to be spending around 10,000 crores (INR 100 billion) a year, which right now for the next two years, I don't see a problem with the cash that we have. But if we cannot (or) do get into trouble, we will take the decision so that the consolidated debt-to-EBITDA does not go above 2," a top executive said.

 

In the company's specialty alumina business, the precipitated hydrate facility is expected to be commissioned in Apr-Jun. Hindalco also plans to add 103 megawatts of renewable energy capacity in the current quarter and expects the FY26 renewable energy capacity to reach 522 megawatts. The company said domestic demand for aluminium in the December quarter is likely to have risen 9% on year to 1.5 million tonnes, primarily led by strong demand in the automotive sector. Domestic demand for copper rose 10% to 401,000 tonnes in the December quarter.

 

NOVELIS

Novelis, Hindalco Industries Ltd.'s US-based subsidiary, had assured investors Wednesday that 70-80% of the damage caused by the fires could be recovered through insurance. The insurance also covers all third-party sourcing that the company is undertaking to manage supplies for the time being. The impact of the fires on Novelis's March quarter volume is likely to be simiar to that in the December quarter, at around 70,000-72,000 tonnes, the management said. However, since the March quarter is a seasonally strong one for the company, its total volumes will be higher than in the December quarter, it said.

 

"...quarter four is always one of the peak quarters that we have. So you are right to think that in quarter four, we will see significantly higher volumes as compared to quarter three. But I'm just trying, and we don't give you a quarter by quarter forecast in any case, but all that I can tell you is that it is very safe to assume that the impact on volume from Oswego in quarter four will be similar to quarter three," the management further said.

 

Novelis's management expects its gross debt to rise well above $8 billion, but once the insurance money starts coming in, it sees the debt falling below that mark. "I would say even by the end of FY27, our gross debt could be coming towards 8 billion or below 8 billion after going much higher than that... so, yeah, there will be an increase in short in the gross debt for a while," a top executive said.

 

Thursday, shares of Hindalco closed slightly lower at INR 964.40 on the National Stock Exchange. The company announced its December quarter earnings after market hours.  End

 

US$1 = INR 90.59

 

Edited by Rajeev Pai

 

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