Shares of the Indian aluminium manufacturing company, Hindalco Industries Limited, rose by around 2 per cent in the Indian stock market, reflecting improved investor confidence in the company’s growth outlook. The development follows a positive update shared by Hindalco on March 16, whereby the Aditya Birla subsidiary denied the production halt of its aluminium extrusion segment.

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The ongoing US-Israel and Iran conflict has disrupted supply and transit through the Strait of Hormuz, affecting 60 per cent of India's LPG imports, sourced through the Hormuz corridor.

However, with the clarification regarding the production halt notice, Hindalco Industries shares have seen a rising trend.  

Hindalco shares’ trend since the US-Israel v Iran conflict

Since the start of the US-Israeli conflict with Iran on February 28, shares of Hindalco Industries have been on an upward graph. The close on February 27 at INR 924.7 (USD 10) saw an immediate spike of 1.7 per cent on the next session on March 2, closing at INR 940 (USD 10.17).

The rising trend hit an intraday high of INR 983.5 (USD 10.64), a gain of 6.4 per cent since the beginning of the Middle East geopolitical tensions. This continued till March 12, the session closing at INR 969.75 (USD 10.49), an increase of 4.9 per cent. The rumour of pausing the extruded aluminium production-halt resulted in a dip in the shares, which slipped by 6.2 per cent to INR 910.05 (USD 9.84) on March 13.  

Hindalco’s official announcement clarifying that there has been no halt in operations of its Aluminium Extrusions business, the company’s shares started rising. As of March 17 midday, its shares stood at INR 933.1 (USD 10.09), recovering from the fall and marking an increase of 2.5 per cent from the close on March 13.  

Why is the aluminium business crucial for Hindalco?

Aluminium extrusions, used across automotive, construction, electrical and industrial applications, are emerging as a key growth driver. Rising infrastructure activity and increasing adoption of electric vehicles are expected to boost demand for lightweight, high-strength aluminium products.

Hindalco’s aluminium business, combining both upstream and downstream activities, contributes 20 to 25 per cent of the company’s revenue in India. Adding its subsidiary Novelis in the calculation, which fetches 50 per cent of the company’s revenue, aluminium production alone accounts for the majority (or approximately 75 per cent) of Hindalco’s annual revenue.

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