Shares of the world’s largest aluminium company by revenues and the world’s second-largest copper rods manufacturer surged by 1.3 percent on BSE to Rs. 694.45 on Friday, after the company announced an investment of $10 billion across the India business and Novelis.
With a market capitalisation of Rs. 1.53 lakh crores, at 12:05 p.m., the shares of Hindalco Industries Limited were trading in the green at Rs. 692, up by nearly 1 percent, as against its previous closing price of Rs. 685.5.
What’s the News:
Addressing the company’s 65th Annual General Meeting (AGM) held on August 22nd, Chairman Kumar Mangalam Birla announced that Hindalco Industries is poised to undertake a major expansion involving investments of $10 billion.
This expansion involves ongoing as well as upcoming projects including Aluminium and Copper smelter expansions, the Aditya FRP plant, the new alumina refinery in Rayagada, and the Bay Minnette expansion in Novelis.
Birla expects that India’s aluminium consumption, which was 5 million tonnes in FY24, is anticipated to double to nearly 10 million tonnes over the next decade. Additionally, he expects a 10 percent growth in copper consumption in the coming years.
Expansions Plans:
Hindalco is considering a nearly 2 lakh tonne brownfield expansion at its Aditya Aluminium smelter in Odisha, which will be significantly powered by renewable energy.
The company is also setting up a greenfield alumina refinery in Rayagada, Odisha, with the first phase of 8.5 lakh tonnes expected to be commissioned by FY27.
Additionally, Hindalco is planning to expand its copper smelting capacity and is considering the setting up of a brownfield facility in Gujarat to address the growing demand for this critical metal in India.
The company is constructing India’s largest Copper Inner Groove Tube plant at Wagodia, Gujarat, which is set to be commissioned by the end of
CY24. This plant aims to decrease the country’s reliance on imports of this key component used in air conditioners.
Hindalco has already secured long-term contracts for the new beverage packaging capacity at this facility, which is anticipated to start operations in the second half of CY26.
Looking ahead, the company’s Superfine Precipitated Hydrate plant, the first and only producer of this essential flame-retardant material for wires and cables in India, is expected to be ready for commercialisation in FY25.
Financials:
The company has reported a significant growth in the revenue from operations, with a 7.6 percent YoY rise from Rs. 52,991 crores in Q1FY24 to Rs. 57,013 crores in Q1FY25.
Similarly, the net profit jumped by 25.3 percent YoY from Rs. 2,454 crores to Rs. 3,074 crores, during the same period.
In FY24, the company’s Copper Business delivered outstanding results, achieving an all-time high EBITDA of Rs. 2,616 crores, reflecting a 16 percent increase from the previous year. The business not only surpassed 5 lakh tonnes in sales for the first time but also became the 2nd largest Copper Rod producer globally outside of China.
This robust performance was supported by consistent operational excellence, cost optimisation measures, and strong macroeconomic conditions.
Hindalco maintained a robust balance sheet and liquidity position, enabling the company to keep its Net Debt to EBITDA ratio below 1.5x.
Stock Performance:
The shares of Hindalco Industries delivered positive returns of nearly 49.2 percent in one year as well as around 11.2 percent returns year-to-date.
About the company:
Incorporated in 1958, Hindalco Industries Limited, the metals flagship company of the Aditya Birla Group, is primarily engaged in two main streams of business namely Aluminium and Copper.
Along with its subsidiary Novelis, Hindalco is the global leader in flat-rolled products and the world’s largest recycler of aluminium.
Written by Shivani Singh
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