Hindalco: revenue and profit grow at double-digit rates, but debt rose by 287 billion over the year

25 августа Hindalco раскрыла результаты за первый квартал 2026 финансового года: выручка выросла на 32,1% год к году, до 848,3 млрд INR, EBITDA – на 61,1%, до 116,4 млрд INR, чистая прибыль – на 75,1%, до 70,1 млрд INR. Рост обеспечен высокими ценами на алюминий и медью, а также увеличением объёмов. При этом чистый долг за год вырос на 287 млрд INR, до 823,1 млрд INR, что делает оценку акций умеренно привлекательной: при P/E 14,1 и EV/EBITDA 7,2 против среднего за три года 7,3, upside по модели портала составляет +4%.

Key takeaways

— Revenue grew 32.1% driven by high aluminium prices and increased sales volumes

— EBITDA margin expanded to 12.2% from 10.0% a year earlier, helped by operating leverage

— Net profit rose 75.1% to INR 70.1 billion, with no major one-off items

— Net debt increased by INR 287 billion over the year to INR 823.1 billion, equivalent to 1.9x EBITDA for the trailing twelve months

— Capital expenditure and dividends: Hindalco pays a modest dividend, yield 0.49%

— Valuation: P/E of 14.1 and EV/EBITDA of 7.2 are close to three-year averages, upside on the portal's model +4%

Attractiveness

Key figures, INR bn

Revenue grew 32.1% driven by high aluminium prices and increased sales volumes

In the first quarter of fiscal 2026, Hindalco's revenue reached INR 848.3 billion, up 32.1% year-on-year. This is the highest quarterly growth rate in the last four quarters: the previous three quarters showed growth of 13–20%.

The main drivers were high aluminium prices on global markets and increased sales volumes in the aluminium and copper segments. The company does not disclose revenue breakdown by segment in the report, but the dynamics are consistent with market conditions.

EBITDA margin expanded to 12.2% from 10.0% a year earlier, helped by operating leverage

EBITDA in the reported quarter grew 61.1% year-on-year to INR 116.4 billion, and the EBITDA margin expanded to 12.2% from 10.0% in the first quarter of the previous year. The margin improvement is explained by operating leverage: with revenue growing 32%, fixed costs are spread over a larger base.

This is a notable improvement compared to previous quarters: for example, in the third quarter of 2025 the EBITDA margin was only 6.9%, and in the fourth quarter of 2025 it was 25.2% (likely including one-off items). In the reported quarter, the margin returned to levels close to the average of recent years.

Net profit rose 75.1% to INR 70.1 billion, with no major one-off items

Net profit for the first quarter of 2026 was INR 70.1 billion, up 75.1% year-on-year. Profit growth outpaced EBITDA growth due to operating leverage and possibly a lower effective tax rate, but the company does not disclose details.

Unlike the fourth quarter of 2025, when net profit was only INR 26.0 billion on EBITDA of INR 196.8 billion (indicating large one-off write-offs or tax effects), the reported quarter's profit looks quality. The net margin was 8.3% versus 6.2% a year earlier.

Net debt increased by INR 287 billion over the year to INR 823.1 billion, equivalent to 1.9x EBITDA for the trailing twelve months

At the end of the first quarter of 2026, Hindalco's net debt stood at INR 823.1 billion, up INR 287 billion year-on-year (over the last 12 months) and up INR 205.8 billion from the previous reporting date. The increase in debt is related to capital expenditure and higher working capital, although the company does not disclose details.

The ratio of net debt to EBITDA for the trailing twelve months is 1.9. This is a moderate level for a metals company, but it has risen over the year, which warrants attention, especially if aluminium prices turn down.

Capital expenditure and dividends: Hindalco pays a modest dividend, yield 0.49%

Hindalco pays dividends, but they are modest: over the trailing twelve months, the dividend yield is 0.49% at the current price. The company does not disclose its payout policy in the report, but historically it pays out a small percentage of profit.

At this level of yield, dividends are unlikely to be a key factor for investors. The main focus is on profit growth and cash flows, which the company reinvests in capacity expansion.

Valuation: P/E of 14.1 and EV/EBITDA of 7.2 are close to three-year averages, upside on the portal's model +4%

Hindalco's current multiples: P/E for the trailing twelve months is 14.1, EV/EBITDA is 7.2. The three-year average EV/EBITDA is 7.3, meaning the shares trade almost exactly in line with their own history.

According to the portal's model, which assesses EBITDA growth and a target multiple, the upside potential of the shares is +4%. This implies that at the current price the shares are fairly valued, and for significant growth either a further rise in aluminium prices or a reduction in debt burden is needed.

Valuation on the latest reported figures

Bottom line

Hindalco's reported quarter showed strong revenue and profit growth, driven by high aluminium prices and operating leverage. Margins expanded, and net profit looks quality, without major one-off items. However, the increase in debt by INR 287 billion over the year and modest dividends temper the attractiveness of the shares. With valuation close to three-year averages and upside of +4% on the portal's model, the shares look rather attractive for long-term investors, but without a clear catalyst for re-rating.