Hindalco Industries Share Hits All-Time High: Why It’s Rising Despite Pressure on 55% of Its Business

Hindalco Industries’ share has been on a massive run lately. In just two months, the share price has jumped nearly 35%, touching a fresh all-time high of ₹1,154. At first glance, most headlines will tell you this rally is happening because global metal prices are improving. That is partly true. But if you look a little deeper, there’s something far more interesting happening underneath.

The strange part is this: Hindalco’s biggest business division is actually going through a serious operational crisis right now. Yet the stock keeps climbing. So what exactly is going on here?

The Core Business: From Raw Metal to Everyday Products

Hindalco mainly works with two metals: aluminium and copper.

Think of it like this:

• First, the company takes raw materials from the ground and turns them into basic metals.
• Then, instead of only selling raw metal, it converts them into useful products that industries actually need.

For aluminium, Hindalco makes things like beverage cans, EV battery parts, foils, and AC components. For copper, it makes copper rods and materials used in electrical equipment, wiring, and infrastructure.

The company also focuses heavily on recycling metal through its global subsidiary, Novelis. This helps Hindalco earn more stable profits even when global metal prices become volatile.

Its business is divided into two parts:

• India Business: Produces aluminium, copper, and industrial products locally.
• Novelis (US subsidiary): Focuses mainly on aluminium recycling and advanced aluminium products for global markets.

And that’s where the real story begins.

The Novelis Problem: Hindalco’s US Business Is Under Pressure

Novelis is Hindalco’s US-based subsidiary, and it contributes close to 55% of Hindalco’s total global revenue. For a long time, Novelis was being discussed as a major IPO candidate in the US Stock market. But the company eventually delayed those plans because market conditions in the West became too volatile for a strong valuation. And honestly, that IPO delay is not even the biggest issue anymore.

Novelis has recently been dealing with major operational problems after two fires broke out at its important Oswego facility in New York. Those incidents badly disrupted production. As a result:

• Rolled product shipments dropped 12% to 844 kilotonnes in the latest quarter
• Novelis swung from a $294 million (~₹2,800 crore) profit last year (Q4 FY25) to an $84 million (~₹800) net loss this year

That’s a huge reversal. Naturally, this raises a simple question:

If Hindalco’s biggest business segment is struggling this badly, why is the stock still hitting record highs?

The Big Shift: India Quietly Became the Real Growth Engine

While the US business was struggling with factory disruptions and repair costs, Hindalco’s Indian operations stepped up in a massive way.

The Copper Business Turned Into a Powerhouse

India’s infrastructure boom is creating strong demand for metals, wires, electrical equipment, and industrial materials. That helped Hindalco’s copper business deliver record performance. Its operating profit (EBITDA, basically the company’s core business profit before interest and taxes) jumped 48% year-on-year to ₹907 crore.

Aluminium Margins Also Improved Strongly

The Indian aluminium business also performed exceptionally well. Operating profits rose 13% to ₹5,448 crore. Even more impressive, the business achieved an operating margin of 48%, which is considered world-class in the metals industry.

Demand from sectors like:

• EVs
• Renewable energy
• Electronics
• Infrastructure

is helping India become a major growth pillar for the company. And investors are noticing that Hindalco is no longer completely dependent on one geography or one factory. That’s a very important shift.

Understanding the Q4 Numbers

This tug-of-war between India and the US explains why Hindalco’s latest quarterly results looked confusing at first glance.

• Revenue Was Strong: Total revenue rose 20% year-on-year to a record ₹78,133 crore.
• But Profit Fell Sharply: Reported net profit (PAT) dropped 51% to ₹2,597 crore.

Now, this is where many retail investors panic unnecessarily.

The sharp profit decline mainly happened because the company booked a one-time accounting charge of ₹4,171 crore related to the US factory fire damage. In simple words, Hindalco had to set aside money for repairs and losses linked to the incident. But the core business itself actually stayed healthy.

The company’s operating profit (EBITDA) rose 9% to ₹11,197 crore. So the business engine itself is still running strongly. It just had to absorb a temporary repair bill.

What Major Brokerages Are Saying

Large institutional brokerages also seem to be focusing more on Hindalco’s long-term strengths rather than the temporary US setback.

• Axis Securities: Axis Securities upgraded the stock from HOLD to BUY, giving a target price of ₹1,220 per share. They believe Hindalco’s production costs remain globally competitive and are particularly optimistic about the company’s copper business growth.
• Motilal Oswal: Motilal Oswal continues to maintain a BUY rating with a target price of ₹1,280. They see the US fire incident as temporary and expect production levels to recover gradually over the coming quarters. They are also closely watching the Bay Minette project in the US, which could become a major long-term growth driver.
• Morgan Stanley: Morgan Stanley initiated coverage with an “Overweight” rating. The brokerage believes Hindalco is entering a strong structural growth phase because of India’s long-term economic expansion and improving global aluminium demand.

What Retail Investors Should Watch Going Forward

Even though the business outlook looks strong, investors should still keep an eye on some important risks and milestones.

• Rising Power Costs: Making aluminium requires enormous amounts of electricity. If coal supply costs rise sharply or captive coal mines get delayed, profit margins could come under pressure.
• Recovery of the Oswego Plant: Management says the fire-hit US facility should restart ahead of schedule. The next few quarterly results will be important because investors will want to see shipment volumes recover from the current weak levels.
• Bay Minette Mega Project: Novelis is building a massive $5 billion facility in Alabama, USA. This plant is expected to become a major long-term growth engine once fully operational later this year. The plant will operate a cold mill to process and roll 600 kilotonnes of aluminium products.

Valuation Strategy

Right now, Hindalco’s Trailing P/E ratio is around 18.35x, compared to the industry average of 21.7x. So, the stock is not looking extremely expensive versus peers. But there’s another side to this story. As per screener, its own 5-year average P/E is much lower at 10.9x, which tells us investors are already pricing in a lot of future growth and optimism. Given this setup, some long-term investors may prefer to stay patient rather than chase sharp rallies immediately. Historically, quality metal stocks often see periodic corrections, and those phases sometimes offer more comfortable entry points from a risk-reward perspective.