Hindalco copper EBITDA jumps 164% despite 3% market fall

Hindalco Industries Ltd reported copper earnings before interest, tax, depreciation and amortisation (EBITDA) of Rs 1,673 crore in Q2 FY27, up 164% year on year, despite India’s copper market declining 3% to 388 kilotonnes (KT). Hindalco attributed the sequential improvement to smelter normalisation, higher London Metal Exchange (LME) prices and by-product realisation, including a one-time gain.

Why did Hindalco copper EBITDA rise while the market contracted?

Hindalco’s copper EBITDA rose to Rs 1,673 crore in Q2 FY27 from Rs 634 crore in Q2 FY26, while segment revenue increased 47% to Rs 21,374 crore from Rs 14,563 crore. Metal shipments increased by 2% year on year to 116 KT from 113 KT, meaning the rise in EBITDA was substantially larger than the increase in volume.

EBITDA per tonne increased 136% to $1,510 in Q2 FY27 from $641 in Q2 FY26. Hindalco said the higher per-tonne outcome reflected higher LME prices and by-product realisation, and disclosed that the Q2 FY27 figure included a one-time gain. The presentation does not quantify the gain or separate its contribution from by-product realisation.

Hindalco’s Q2 EBITDA was also 82% above Rs 918 crore in Q1 FY27. The company attributed that sequential increase to normalisation after a planned smelter shutdown in Q1 FY27, while metal shipments recovered 10% quarter on quarter from 105 KT. EBITDA per tonne rose 63% sequentially from $926.

How did India’s copper market change in Q2 FY27?

India’s copper market declined to 388 KT in Q2 FY27 from 398 KT in Q2 FY26, a 3% year-on-year reduction. The market was nevertheless 29 KT above the 359 KT reported in Q1 FY27, showing a sequential recovery that did not restore demand to the prior-year quarterly level.

Hindalco said continued demand growth in building and construction and power was offset by lower demand for consumer durables and electrical equipment. Its Q2 FY27 market update also showed higher sulphuric acid prices and lower treatment and refining charges, or TC/RC, versus Q2 FY26, without assigning a financial effect to either factor.

The market’s supply composition changed during the quarter. Domestic refined copper fell to 146 KT from 157 KT a year earlier and 175 KT in Q1 FY27. Scrap from domestic and imported sources increased to 183 KT from 161 KT in Q2 FY26, while refined imports were 59 KT, below 80 KT a year earlier but above 39 KT in the preceding quarter.

What happened to Hindalco’s copper shipments and rod volumes?

Hindalco shipped 116 KT of copper metal in Q2 FY27, compared with 113 KT in Q2 FY26 and 105 KT in Q1 FY27. The quarterly volume recovery followed the planned smelter shutdown cited by Hindalco, but first-half FY27 shipments remained 7% below the prior-year period at 221 KT, versus 237 KT in H1 FY26.

Continuous cast rod shipments were 96 KT in Q2 FY27, unchanged from Q1 FY27 and marginally below 97 KT in Q2 FY26. The company therefore reported flat quarter-on-quarter rod volume even as total metal shipments rose 11 KT from Q1 FY27. Hindalco did not disclose separate revenue or EBITDA for continuous cast rods.

The volume and earnings comparison shows the role of realisations and operating recovery in the quarter. From Q2 FY26 to Q2 FY27, shipments rose 3 KT while EBITDA increased Rs 1,039 crore. From Q1 FY27 to Q2 FY27, shipments rose 11 KT and EBITDA increased Rs 755 crore, alongside the disclosed improvement in EBITDA per tonne.

How did copper compare with Hindalco’s other India businesses?

Hindalco’s copper EBITDA of Rs 1,673 crore compared with Rs 7,009 crore for aluminium upstream and Rs 329 crore for aluminium downstream in Q2 FY27. Copper recorded the highest year-on-year EBITDA growth among the three India business segments at 164%, compared with 55% for aluminium upstream and 26% for aluminium downstream.

Hindalco’s India-business EBITDA rose 66% to Rs 9,011 crore in Q2 FY27 from Rs 5,419 crore in Q2 FY26. Copper accounted for Rs 1,673 crore of the Q2 FY27 India-business total, while the group reported revenue of Rs 36,123 crore and profit after tax of Rs 5,852 crore for its India businesses.

Hindalco classifies copper, Novelis and aluminium downstream as non-LME-linked businesses, defined in the presentation as having low correlation with LME. This group generated all-time-high EBITDA of Rs 6,860 crore in Q2 FY27, up 50% year on year and 13% sequentially, despite a 10% decline in LME prices from Q1 FY27.

At the consolidated level, Hindalco reported revenue of Rs 91,708 crore in Q2 FY27, up 39% year on year, and business segment EBITDA of Rs 13,869 crore, up 52%. The broader result included Novelis and aluminium operations, so it does not isolate copper’s contribution, but it provides context for the Rs 1,039 crore year-on-year rise in copper EBITDA.

What copper capacity additions is Hindalco planning?

Hindalco plans copper capacity above 1,200 thousand tonnes per annum after the expansions listed in its India growth strategy. Projects under execution include a 300 KT copper smelter and 300 KT of continuous cast rod capacity, both expected to be commissioned in FY29.

The project list also includes 50 KT of copper and e-waste recycling expected in FY27 and 25 KT of inner-groove tubes that are scaling up. Projects under evaluation comprise another 300 KT copper smelter, 50 KT of inner-groove tubes, and 150 KT of copper and e-waste recycling.

Hindalco places projects under execution across its India businesses at about Rs 52,000 crore of capital expenditure during FY26 to FY29, while projects under evaluation are listed at more than Rs 50,000 crore. Copper EBITDA reached Rs 2,591 crore in H1 FY27, compared with Rs 1,307 crore in H1 FY26, even as first-half metal shipments declined to 221 KT from 237 KT.

Conclusion

Hindalco’s Q2 FY27 copper performance reflected higher earnings per tonne and smelter normalisation rather than a broad expansion in Indian copper demand. The domestic market declined 3% year on year to 388 KT, while copper EBITDA rose 164% to Rs 1,673 crore and metal shipments increased only 2% to 116 KT.

The next disclosed milestones are FY27 commissioning of 50 KT of copper and e-waste recycling, followed by the FY29 targets for a 300 KT smelter and 300 KT continuous cast rod project. Hindalco also identifies further smelting and recycling capacity as under evaluation, while the size and recurrence of the one-time Q2 FY27 gain remain undisclosed.