Hindalco Shares Log Only Modest Gains Despite Unveiling Massive $10B Expansion Plans

Shares of Hindalco Industries were clocking meagre gains on Friday after the company laid out its plans for a major expansion of its key minerals business to meet growing demand.

What Happened: The Aditya Birla flagship firm plans to invest $10 billion (₹83,899 crore) in major expansion projects, Chairman Kumar Mangalam Birla announced at the company’s annual general meeting on August 22.

These projects include expansions in aluminium and copper smelters, the Aditya FRP plant, a new alumina refinery in Rayagada and the Bay Minette expansion in Novelis.

Hindalco is considering a brownfield expansion of around 2 lakh tonnes at its Aditya Aluminium smelter in Odisha. A significant part of the power for this expansion will come from renewable energy sources, Birla mentioned.

The company also plans to increase its copper smelting capacity and is exploring a brownfield facility in Gujarat to meet India’s growing demand for copper.

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Sprucing Up Disappointing Financials? In the June quarter, Hindalco reported a 25% year-on-year increase in net profit to ₹3,074 crore, but this was below market expectations. Revenue from the copper business rose to ₹13,292 crore, a 15.6% increase due to higher shipments and realisations. Revenue from aluminium upstream and downstream increased by 9.6% and 18%, respectively, as reported in an exchange filing earlier this month.

With domestic demand for aluminium rising, India’s leading producers, including Hindalco, are planning significant expansions and investments to increase production and achieve vertical integration. Hindalco is setting up a greenfield alumina refinery in Rayagada, Odisha, with the first phase of 850,000 tonnes expected to start in FY27.

Birla highlighted strategic investments in Novelis and a rolling and recycling project at Bay Minette, which is set to become one of the most advanced and automated plants in the industry, giving Novelis a strong position in the market.

“We have already secured long-term contracts for all the new beverage packaging capacity at this plant, which is expected to start commissioning in the second half of 2026,” Birla said.

Price Action: Hindalco’s share price was up 0.36% at ₹688.05 near the start of trade on Friday.

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