Hindalco Trades Higher Following Record Q2 Earnings as Brokerages Maintain Buy Ratings

Shares of Hindalco Industries traded higher on Monday following the release of the company’s record financial results for the July-September quarter. Trading at ₹959.85, up 0.72 per cent or ₹6.85 on the National Stock Exchange around midday, the stock opened at ₹947.90 and touched an intraday high of ₹960.70 and a low of ₹919.30. Buy orders accounted for 57.91 per cent of total activity, with a traded volume of 47.20 lakh shares valued at ₹444.28 crore. The stock's 52-week trading range stands between ₹771.85 and ₹1,176.

For the second quarter, Hindalco reported a consolidated revenue of ₹91,708 crore, marking a 39 per cent increase year-on-year. Net profit reached an all-time high of ₹7,533 crore, up 59 per cent compared to the same period last year. The company's copper segment posted record EBITDA of ₹1,673 crore, a 164 per cent rise, although management noted that approximately ₹3.5 billion of that figure stemmed from non-recurring items such as copper slag sales and derivative gains. Meanwhile, Novelis adjusted EBITDA stood at $508 million, up 20 per cent year-on-year, supported by normalised production at the Oswego plant and $39 million in insurance recoveries. Consolidated net debt-to-EBITDA was recorded at 1.80x as of September 30, up from 1.23x a year prior, driven by accelerated capital expenditure on growth projects. Management projected that consolidated debt would peak at ₹80,000 crore, while targeting Novelis leverage at 2.5x by FY31.

Following the earnings announcement, three major brokerages maintained their buy ratings on the stock, even as two trimmed their target prices. Elara Securities kept the highest target at ₹1,227, representing a 28 per cent upside from Thursday’s close of ₹958, pointing to record copper EBITDA and anticipated improvements at Novelis as the Bay Minette project ramps up. Motilal Oswal retained a buy rating with a target of ₹1,180 and raised its FY27 estimates by 5 per cent to reflect the strong earnings beat. However, the brokerage cautioned that second-half earnings for both India operations and Novelis are likely to remain subdued due to lower LME aluminium prices and higher production costs. Axis Direct lowered its target price to ₹1,060 from ₹1,155, citing softer aluminium realisations and higher raw material cost assumptions, while still maintaining its buy call.

"Hindalco's record quarterly performance highlights the resilience of its core segments, particularly copper and Novelis, even amidst rising capital expenditures and leverage. While management targets long-term deleveraging by FY31, investors should carefully weigh near-term headwinds such as fluctuating LME aluminium prices and raw material costs. Brokerage backing indicates underlying confidence in the company's long-term growth and expansion projects, making disciplined execution key to sustaining these financial gains." — Dr. Shishir Gupta, Founder & CEO, StartupLanes