Hindalco plans ₹1 trillion investment pipeline as India aluminium demand grows

Hindalco Industries is pursuing a major capacity expansion programme, with around INR 500 billion (USD 5.3 million) worth of projects under execution in India and another INR 500 billion (USD 5.3 million) of potential investments under evaluation over the next five years. The planned investments cover aluminium, alumina and copper production, downstream operations and captive mining, as the company prepares for rising domestic demand.

India's aluminium demand is expected to grow by around 7 per cent annually over the next five years, according to Hindalco management. While the electrical sector remains a key driver, demand from automobiles, packaging, consumer electronics, home appliances and data centres is also gaining importance. Hindalco is looking to increase the share of higher-margin value-added products, including flat-rolled products, foils and extrusions, while reducing its dependence on London Metal Exchange (LME)-linked earnings.

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Hindalco’s investment plans come after a strong September quarter, when it reported its highest-ever quarterly revenue and net profit. The results were supported by higher metal prices and better performance at Novelis. Growth may slow in the second half of the financial year as aluminium prices ease and input costs increase. Higher coal prices could also affect margins in the December quarter. However, the commissioning of a captive coal mine and backward integration are expected to help reduce costs over the medium term.

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Novelis is also moving towards a phase focused on earnings growth and debt reduction after operational disruptions and heavy capital expenditure. Commercial shipments from its Bay Minette facility are expected to begin in the June quarter of FY2028. The company is targeting annualised cost savings of USD 300 million by the end of FY27 and USD 350–400 million by the end of FY2028, analysts expect. A brokerage has a target price of INR 1,180 (USD 12.6) for Hindalco and raised its FY2027 revenue, EBITDA and profit estimates by 5 per cent. Hindalco shares closed 1 per cent higher at INR 960 (USD 10.2) on the BSE on Wednesday.