Hindalco Industries Limited

Basic Materials — Aluminum · NSE

₹908.00+₹14.15 (+1.58%)

DalalBaazaar Score

55 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Low

Driven by negative free cash flow.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

The 60-second version of Hindalco Industries Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Hindalco Industries Limited, together with its subsidiaries, manufactures and distributes aluminum and copper products in India and internationally. It operates through four segments: Novelis, Aluminium Upstream, Aluminium Downstream, and Copper.

IndustryAluminum

SectorBasic Materials

Employees85,107

Annual revenue₹2.73 L Cr

How does it make money?

Turns over ₹2.73 L Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹14 left at the operating level before interest, tax and depreciation. Each of its 85,107 employees supports ₹3.20 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹3.20 Cr

Who are its competitors?

The closest listed comparisons in its industry are VEDANTA LIMITED, TATA STEEL LIMITED, JSW STEEL LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 9.4% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE18.7%

What is the outlook?

23 analysts covering the stock expect revenue to grow about 4.3% and earnings to fall about 1.9% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+4.3%

Est. earnings growth-1.9%

Analysts23

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +23% while net margin moved +8% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+23%

Margin effect+8%

DalalBaazaar Score

55/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ ROE of 9.8% is weak

Quality vs. Valuation

Company Quality

49/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

71/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

12.3x

3Y Median

13.7x

40 monthly readings · mean 13.5x · range 9.8x–16.9x

Sector Median

12.0x

median of 3 sector peers

🟡Currently trading close to its 3y median of 13.7x — the market is paying about what it usually pays for this company.

🟡Against its sector it is priced broadly in line with the peer median of 12.0x.

vs. its own history

Fair

13.7x median over 40 months · -10%

vs. sector peers

Fair

12.0x median of 3 peers · +3%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

7.4x

PEG

1.25

What's Good / What's Bad

🟢 What's Going Well2

Margins are improving
EBITDA margin is up from 11.0% to 14.3% over 3 years.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

4 items require attention · 1 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 64% over 3 years, from ₹60,291 Cr to ₹99,161 Cr.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹19,846 Cr in the latest year.
🟡Receivables growing faster than salesFinancial
Receivables up 68% against revenue up 23% — sales are being booked faster than they are collected.
🟡Inventory building faster than salesFinancial
Inventory up 76% against revenue up 23% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 11.0% to 14.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 68% against revenue up 23%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Growth barely outpaces inflation
Revenue compounding at 7.1% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 12%✓ 14.3%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA stays below 2x✗ 2.6x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
3Free cash flow remains positive✗ -₹19,846 Cr
Profit that never becomes cash eventually stops being profit.
4Revenue growth stays above 5% a year✓ 7.1% CAGR
Latest reported year was 32.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5ROCE stays above 8%✓ 9.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 4 neutral · 1 weak

Market Cap

₹2.02 L Cr

Large Cap

Large, widely-covered business — typically the steadiest of the bands

P/E (Trailing)

12.3x

Cheap

Cheap against the generic band

P/B Ratio

1.48x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹73.71

Profitable

Profitable on a per-share basis

ROE

9.8%

Moderate

Moderate capital efficiency

ROCE

9.4%

Moderate

Moderate return on the capital in the business

Debt/Equity

0.73x

Moderate

Moderate leverage

Revenue Growth (YoY)

32.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

75.1%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.55%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹19,846 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

8.2x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

13.7%

Average

Average margins

Net Margin

5.5%

Average

Average bottom-line conversion

Current Ratio

1.21

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.95

Market-like

Moves roughly in line with the market

52W Range Position

34%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

937.4 / 990.4

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

31.3

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹2.22 L Cr	₹2.15 L Cr	₹2.37 L Cr	₹2.73 L Cr	+7.1%
EBITDA	₹24,484 Cr	₹24,954 Cr	₹34,538 Cr	₹38,869 Cr	+16.7%
EBITDA Margin	11.0%	11.6%	14.6%	14.3%	—
PAT (Net Profit)	₹10,097 Cr	₹10,155 Cr	₹16,001 Cr	₹13,391 Cr	+9.9%
EPS	₹45.36	₹45.65	₹71.91	₹60.2	+9.9%
ROE	10.7%	9.6%	12.9%	9.8%	—
ROCE	10.2%	10.3%	12.8%	9.4%	—
Total Debt	₹60,291 Cr	₹56,356 Cr	₹63,929 Cr	₹99,161 Cr	+18.0%
Free Cash Flow	₹9,471 Cr	₹8,328 Cr	₹3,761 Cr	-₹19,846 Cr	—

🟢 Revenue has grown at 7.1% a year over 3 years.

🟢 EBITDA has grown at 16.7% a year over 3 years.

🟢 EBITDA Margin has risen from 11.0% to 14.3% over 3 years (+3.2 pts).

🟢 PAT (Net Profit) has grown at 9.9% a year over 3 years.

🟢 EPS has grown at 9.9% a year over 3 years.

🟡 ROE has held roughly flat at 9.8% over 3 years.

🟡 ROCE has held roughly flat at 9.4% over 3 years.

🔴 Total Debt has grown at 18.0% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹9,471 Cr to -₹19,846 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹3.48 L Cr

Total Liabilities

₹2.11 L Cr

Cash & Equivalents

₹14,350 Cr

Operating Cash Flow

₹10,250 Cr

Capex

-₹30,096 Cr

Shareholding (proxy)

Institutional Holding

40.5%

Insider Holding

37.6%

Corporate Actions

Next Earnings

06 Nov 2026

Dividend Rate

₹5

Ex-Dividend Date

10 Jul 2026

Analyst Consensus

Recommendations

18 Buy · 8 Hold · 3 Sell

Target Price (Mean)

₹1,155.55

+27.3% vs CMP

Target Range

₹925 – ₹1,430

Peer Comparison

Company	P/E	ROE
VEDANTA LIMITED	10.4x	18.7%
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%

Recent News

4 mixed2 general

Hindalco Industries to attend investor meets from June 1

scanx.trade, 13 Oct

Vedanta Aluminium, Nalco, Hindalco shares: Aluminium price falls but Emkay sees up to 53% upside

Business Today, 16 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Hindalco Industries Share Price Fall Streak: Analysis

Univest, 08 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Hindalco Industries Limited Just Recorded A 18% EPS Beat: Here's What Analysts Are Forecasting Next

Simply Wall Street, 11 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Hindalco Industries Ltd Technical Momentum Shifts Amid Mixed Indicator Signals

MarketsMojo, 16 Oct

Hindalco Industries Limited Stock 12‑Month Price Target Cut to INR 1125.23, Implies 16% Upside

TradingView, 08 JulAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongValuation · Risk

MiddlingBusiness Quality · Financial Health · Growth

WeakProfitability

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA stays below 2x; Free cash flow remains positive · see Key things to watch ↑