Hindalco's Q2: Resilient profits, growth strategies and major investment plans

Hindalco Industries records a dip from the previous year but maintains a robust performance, positioning for growth, and announces an Rs 8,000 crore investment in a greenfield alumina refinery in Odisha.

Hindalco Industries announced its second-quarter financial results for the fiscal year 2023-24, revealing a profit of Rs 2,196 crore, marking a slight decrease of 0.4 per cent from the corresponding quarter of the previous fiscal year, where it stood at Rs 2,205 crore. 

The revenue from operations for the quarter was reported at Rs 54,169 crore, reflecting a 3.6 per cent decrease compared to Rs 56,176 crore during the same period in the previous fiscal year.

Despite the marginal dip in profit and revenue, the company showcased a robust performance, posting a consolidated EBITDA of Rs 6,096 crore, marking a significant 6 per cent year-on-year increase. The company's solid financial standing is evident in its strong balance sheet and liquidity, maintaining a Net Debt to EBITDA ratio well below 2x, positioning itself favourably for organic growth.

Notably, Hindalco Industries revealed plans to invest Rs 8,000 crore in a 2 million-tonne Greenfield alumina refinery in Odisha, underscoring its commitment to strategic investments and expansion.

A detailed breakdown of the Q2 performance: 

• Hindalco's Novelis recorded total shipments of flat rolled products at 933 Kt, showing a 6 per cent increase quarter-over-quarter, driven largely by a sequential surge in can shipments, which grew by 12 per cent. 
• The revenue for Novelis stood at $4.1 billion, remaining flat quarter-over-quarter, supported by higher shipments.
• The adjusted EBITDA for Novelis reported a 15 per cent quarter-over-quarter increase to $484 million, attributed to higher shipments and improved scrap utilisation.
• In the aluminium (India) business, the upstream revenue for Q2FY24 was Rs 7,878 crore, slightly decreasing from Rs 8,064 crore in the prior quarter. 
• However, the aluminium upstream EBITDA increased by 7 per cent quarter-over-quarter, reaching Rs 2,074 crore, driven by lower input costs. 
• The downstream Q2 revenue for aluminium was Rs 2,629 crore, compared to Rs 2,435 crore in the prior quarter, with downstream EBITDA at Rs 171 crore in Q2FY24, showcasing a 16 per cent sequential increase due to higher volumes.

Satish Pai, the Managing Director of Hindalco Industries, emphasised the company's commitment to sustainability, referring to it as "Sustain-Ability," highlighting the consistent and robust performance. He attributed the positive momentum to the company's focus on cost control and commendable performances across all downstream segments.