Hindalco Set to Report 65% Surge in Q2 Profit: Forecast, Historical Performance and Future Targets

Hindalco Industries Ltd acts as a major producer of metals such as aluminum and copper within the market. As a part of the Aditya Birla group, Hindalco has a wide range of product offering in the aluminum and copper segment. In aluminum, the company provides alumina chemicals, primary aluminum ingots, wire rods, billets, extrusions, rolled products, foil and packaging, alloy wheels and etc. 

Its copper division manufactures copper cathodes, continuous cast copper rods, sulphuric acid , phosphoric acid, phospho gypsum and copper slag. Global and domestic operations makes Hindalco a versatile and leading metals player.

Share Price and Performance

The Hindalco Industries stock at the current market close was at ₹ 655.35 as it posted a rise by ₹ 4.90 or 0.75%. The stock itself fluctuated throughout the day towards its current price range between ₹638.70 to ₹657.60 and the 52 week range is ₹481.10 to ₹772.65 suggesting furthermore not only the daily volatility of the stock price but also the volatility experienced by the stock throughout the year. Volume amounted to 4,932,732 in comparison to the Average Daily trading Volume of 6,343,670 shares showing the signs of volatile interest. 

As compared to the overall market, the company has a beta of 1.45, which confirms its relative volatility. As at the reporting date, with a TTM PE ratio of 13.52 and TTM EPS 48.46, the company’s earning profile depicts good and sound profitability. The next earnings date is to be released later on November 11th 2024. It also gives a forward dividend of ₹3.50 per share, giving a yield of 0.54% and last ex-dividend date is on August 9, 2024.

Hindalco Set to Report 65% Surge in Q2 Profit Amid Lower Costs

Hindalco Industries, part of the Aditya Birla Group, is projected to post a remarkable 65% increase in net profit for Q2FY25, with estimates suggesting a net profit of ₹3,625 crore, up from ₹2,196 crore in the same quarter last year. Despite weaker-than-expected performance from its US subsidiary, Novelis, due to operational disruptions, the company’s core aluminum segment is expected to drive growth, with revenue anticipated to rise 6% year-over-year to ₹57,704 crore, according to a report from Axis Securities.

Key financial expectations for Hindalco include a 26% increase in EBITDA to ₹7,092 crore, bolstered by slightly higher aluminum sales and improved metal premiums. Novelis' performance was impacted by reduced shipments caused by flooding at its plant in Sierre, Switzerland, although other regional volumes offset some of the losses.

Hindalco’s standalone business is also expected to perform well, with a forecasted revenue increase of 4% to ₹21,501 crore and a robust 47% rise in EBITDA to ₹2,574 crore due to operational efficiencies and lower power costs. The company’s aluminum segment is likely to benefit from higher LME aluminum and alumina prices, while its copper segment remains steady with flat sales volumes.

Current Valuation Stats

Hindalco Industries has a market capitalization of ₹1.44 trillion, which ranks them highly among the metals industries. The enterprise value (EV) is ₹1.83 trillion giving the total shareholders’ value including debt held by them when assessing the corporation. At the P/E ratio of 13.43 the stock looks fairly priced in terms of earnings and a P/B ratio of 1.36 means reasonable investor confidence in the company’s assets. 

With P/S of 0.66, it can be noted that the market tends to value each unit of sales at considerably less than its revenue producing capability. Furthermore, based on data framed till up-to date, enterprise value to to Operating Revenue (EV/Revenue) stands at 0.83 and enterprise value to EBITDA (EV/EBITDA) at 9.52, which clearly shows nine operationally healthy income and cash flow standards.

Financial Highlights

Moving on to the efficiency block, the profitability measure is realized by Hindalco’s profit margin of 4.90% implying the ability to make profit from the revenues. Total annual revenues for the trailing twelve months (TTM) amounted to ₹2.2 trillion and net income, as well, available to common shareholders was ₹107.75 billion proving the company’s solid earnings. The earning per share (EPS) on a diluted basis is ₹48.46 which speaks volume about earning performance. 

On the balance sheet, the company’s total cash position (most recent quarter) is ₹181.41 billion, with a debt-to-equity ratio of 57.30%, suggesting moderate leverage. These financial highlights reflect Hindalco’s strong cash reserves and an efficient balance of debt, supporting future growth and operational stability.

Hindalco’s Return Analysis Compared to S&P BSE SENSEX

Hindalco industries has had good show in periods of one, three and five years, however, in the short term it has actually been lower than the S&P BSE SENSEX. As of November 11, 2024, the trailing returns indicate the following performance metrics:

• Year-to-Date (YTD) Return: For the financial year, Hindalco gave its investor 7.20% while the S&P BSE SENSEX gave 10.04%.

• 1-Year Return: Same when done on the 1-year return basis Hindalco was far better with 36.94% while SENSEX stood at 22.48 % only.

• 3-Year Return: Finally, Hindalco outperforms the benchmark index, SENSEX, in the period of more than 3 years with 48.86% return.

• 5-Year Return: With a 5 year return of 232.39% Hindalco Industries Ltd has outclassed SENSEX’s return of 97.15%.

These figures demonstrate Hindalco’s favorable long-term development and stability over the past 1-year, 3-years, and 5-years where it has performed better than the market index.

Technical Analysis

Hindalco’s price has been bearish on its daily chart since it made a high at ₹772 on October 3. Price has also at one recent time fell below an important support level at ₹713 suggesting further down move. If this bearish trend persists, one can probably find the stock going down to the next support level of around ₹615. 

But if Hindalco announces healthy and favorable earnings it can reverse in the opposite direction. In that case, the price may fast back to the key resistance of ₹ 713 and possibly retest the ₹ 772 resistance implying reversal from the current bearish trend. These support and resistance levels will be important in defining direction of this stock in the short term.

Price Prediction

Conclusion

Aluminum and Copper major Hindalco Industries Ltd. is in a robust growth path in spite of a few hiccups recently. The fact is, that in the increase of the revenues the company was supported by the powerful aluminum segment, which shows steadiness of its financials, as global demand is volatile. 

Although from the technical perspective short-term bears’ pressure can be observed, better than expected earnings that are anticipated may turn the scenario around making Hindalco a hugely promising stock with a long term future. Despite declining revenues its operations reveal healthy revenue growth, effective cost control and a stable balance sheet, which position Hindalco as a robust firm in the face of future shocks but also place it in a good stead to unlock future value.