# Hindalco Beats Q2 Profit Estimates Amid Rising Input Costs Strong metal prices drive Hindalco's profit growth despite significant raw material cost pressures. - **Source:** [mint - companies](https://www.livemint.com/rss/companies) - **Published:** 2026-11-06 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/44ad31ce-5646-4fca-9dba-414a90f14345 ## Profit Surges Past Estimates Hindalco Industries reported a 59% jump in consolidated net profit, reaching ₹7,532 crore for the September quarter. This performance significantly outperformed the Bloomberg consensus estimate of ₹6,120.19 crore. The company's revenue from operations also saw a substantial increase, rising to ₹91,708 crore compared to ₹66,058 crore during the same period last year. ## Input Cost Pressures Mount Despite strong earnings, the company faces rising input costs, which increased by 39% during the quarter. Managing director Satish Pai noted that aluminium production costs rose 5% sequentially, driven by higher prices for coal and calcined petroleum coke. These materials are essential for energy-intensive smelting processes and carbon anode production. ## Coal Supply Chain Disruptions Tight coal supplies in northern India, exacerbated by heavy monsoon rains, forced Hindalco to rely on spot auctions. Premiums in these auctions surged by 150-200%, impacting margins. Coal linkage materialisation dropped to 50-60%, causing inventory levels at key smelters like Mahan and Renukoot to fall to 10-11 days, well below the standard requirement. ## Production Cost Outlook Hindalco anticipates a further 5% rise in production costs during the first half of the third quarter due to ongoing supply constraints. However, management expects these pressures to ease after the third quarter as coal availability normalizes. The company is actively monitoring supply chain stability to mitigate further impacts on its smelting operations. ## Metal Price Projections Aluminium prices currently hover around $3,000 per tonne, a level the company expects to maintain over the next two quarters. For fiscal year 2028, market expectations suggest a moderation to $2,600-2,800 per tonne, contingent upon the easing of geopolitical tensions and increased supply contributions from Indonesia and the Middle East region. ## Diversification as a Buffer To mitigate volatility in London Metal Exchange rates, Hindalco is leveraging its diversified portfolio. The company expects its downstream aluminium business to generate over ₹2,000 crore in Ebitda over the next two years. Combined with copper and specialty alumina segments, nearly ₹6,000 crore of Ebitda is expected from businesses less sensitive to LME prices. ## Deleveraging and Debt Strategy Hindalco's debt has reportedly peaked at approximately ₹80,000 crore. The company plans to initiate deleveraging from the fourth quarter, supported by stronger cash generation as the expansion cycle at its US subsidiary, Novelis, nears completion. The goal is to reduce Novelis's net-debt-to-Ebitda ratio from 4.7 to about 2.5 by fiscal year 2031. ## Market and Future Outlook Following the earnings announcement, Hindalco shares closed 2.19% higher at ₹958.40, outperforming the benchmark Sensex. The company remains focused on maintaining a stable earnings platform through its multi-business strategy. Investors are now watching for the completion of the Novelis expansion and the anticipated normalization of coal supply chains in the coming months. ## Sources covering this story - https://www.livemint.com/companies/company-results/hindalco-beats-q2-estimates-as-strong-metal-prices-offset-rising-input-costs-11793962947194.html — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._