Hindalco Declines 2%, Top Nifty Loser as Q4 Profit Plunges and Falls Short of Estimates, Analysts Remain Divided on Outlook

Hindalco Industries Shares Fall 2% After Surprise 51% Drop in Net Profit

Hindalco Industries, a metals major, reported a surprise 51 percent drop in fourth-quarter net profit, missing analyst estimates. As a result, the company's shares fell nearly 2 percent in early trade on Monday, emerging as the top loser on the Nifty 50. The fall in net profit overshadowed stronger-than-expected operating performance in its aluminium business.

At 10:00 am, Hindalco's stock was trading 1.7 percent lower at Rs 1,090.9 on the National Stock Exchange (NSE), even as benchmark indices rallied about 1 percent. Hindalco was the biggest drag on the Nifty, shaving more than four points from the index's gains.

The weakness in the stock came after Hindalco reported a 51 percent year-on-year decline in consolidated net profit to Rs 2,597 crore for the January-March quarter. This was largely due to fire-related disruptions and tariff-related challenges at Novelis, its North American aluminium products business. However, brokerages said that the company's operating performance was stronger than expected across key segments.

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Quarterly Performance Comparison

Citi retained its 'Neutral' rating on Hindalco shares with a target price of Rs 1,170. The brokerage said that quarterly EBITDA exceeded estimates and was driven by robust performance across businesses. Citi expects debt to peak in FY27 before declining but said limited upside from current London Metal Exchange (LME) aluminium prices constrains the stock's re-rating potential.

HSBC remained more constructive, reiterating its 'Buy' rating and target price of Rs 1,430 per share. The brokerage highlighted a 13 percent quarter-on-quarter improvement in aluminium EBITDA and said the business outlook remains strong. HSBC also raised its EBITDA estimates by 2-6 percent, adding that the increase in debt during FY26 was driven by one-off factors and should reverse from FY27 onward.

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Kotak Institutional Equities maintained its cautious stance with a 'Reduce' rating and a target price of Rs 1,100. The brokerage acknowledged EBITDA beats in both the aluminium and copper divisions but flagged medium-term execution risks. It said that Novelis' performance was affected by the shutdown at the Oswego facility in New York, although normalisation is expected during the second half of FY27. Kotak added that higher LME aluminium prices should support margins, though part of the benefit could be offset by elevated input costs.

Hindalco's India aluminium business delivered a strong quarter. Upstream aluminium shipments rose to 339,000 tonnes from 332,000 tonnes a year earlier, helping segment revenue increase 11 percent to Rs 11,418 crore. EBITDA from the segment climbed 13 percent to Rs 5,448 crore, while EBITDA per tonne improved to $1,756. The domestic downstream aluminium business also performed strongly, with sales volumes rising 18 percent to 124,000 tonnes and revenue jumping 35 percent to Rs 4,867 crore.

However, Novelis remained a drag on overall profitability. The company reported a quarterly loss of $84 million after a fire at its Oswego plant disrupted operations and reduced shipments. Quarterly shipments declined 12 percent, although revenue rose 4 percent to $4.8 billion due to higher global metal prices. The company said the Oswego facility remains on track for recommissioning, while its Bay Minette project in Alabama is expected to be fully commissioned later this year.

Hindalco's board recommended a final dividend of Rs 5 per share for FY26. The company announced its results after market hours on Friday, when the stock had closed nearly 1 percent higher at Rs 1,109.2 apiece.