Hindalco profit falls 50.85% as other income turns negative
Revenue grew 20.41% YoY, but faster cost growth and higher interest diluted operating gains while negative other income weighed on reported profit.
Filed 22 May 2026, 17:22 IST · after market close · Hindalco Industries Ltd (HINDALCO)
Key takeaways
- Consolidated net profit fell 50.85% YoY as other income swung to a loss of Rs 3,150 cr and the tax rate rose 5.42 percentage points.
- Revenue grew 20.41% YoY, but expenses grew 21.52%, narrowing operating margin by 0.80 percentage points to 12.82%.
- The stock's first-session decline of 0.87% was modestly worse than its 0.61% median absolute post-results move across eight instances.
Price around the results
Operating recovery did not translate into reported profit
This was Hindalco's consolidated Q4FY26 result. Sequentially, revenue rose 17.46% and expenses rose 16.38%, allowing operating profit to increase 25.32% and operating margin to expand by 0.80 percentage points. Net profit still rose 26.74% QoQ, helped by a 2.82-percentage-point decline in the tax rate, despite other income becoming more negative at Rs 3,150 cr.
YoY margin pressure and negative other income hurt earnings quality
Year on year, expenses grew 21.52% against 20.41% revenue growth, narrowing operating margin by 0.80 percentage points; interest expense also rose 19.22%. Other income was negative and accounted for -91.28% of profit before tax, making the reported Rs 2,597 cr net profit much weaker than the operating result would suggest. The 24.75% tax rate was 5.42 percentage points above last year, adding to the YoY drag on profit.
Margin bounced from Q3 but remains below last year's level
Operating margin improved from 12.02% in Q3FY26 to 12.82% in Q4FY26, interrupting the decline from 13.57% in Q2FY26 rather than marking a third straight quarterly fall. It remains 0.80 percentage points below Q4FY25. Among 51 Commodities peers that have reported, Hindalco's margin was 5.95 percentage points below the 18.77% median and ranked 11th from the bottom.
Novelis update points to savings, capex and commissioning milestones
Management said Novelis delivered more than $125 million of in-year savings from its structural cost-reduction programme in FY26 and expects total cost-efficiency savings of approximately $350-400 million by the end of FY28. The company told analysts that FY27 capital expenditure is expected at $2.1-2.4 billion, including about $350 million of maintenance capex, and that it expects to return to positive free cash flow by the end of FY27. The presentation said the Bay Minette cold mill began commissioning in March and that Oswego's hot mill is expected to return to service in the next few weeks; management also attributed estimated FY26 adjusted EBITDA reductions of $104 million to the Oswego fires and $143 million to tariffs.
Initial decline was close to the stock's usual results reaction
The stock fell 0.87% in the first session after the results, with a 1.55-times volume ratio, versus a median absolute post-results move of 0.61% across the last eight result events. Its history is mixed, with five rises and three falls; the stock was up 3.34% after five sessions but down 11.43% after 15 sessions following this result.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹78,133 cr | ₹66,521 cr | +17.46% | +20.41% |
| Other income | ₹-3,150 cr | ₹-2,064 cr | -52.62% | — |
| Expenses | ₹68,115 cr | ₹58,527 cr | +16.38% | +21.52% |
| Operating profit | ₹10,018 cr | ₹7,994 cr | +25.32% | +13.38% |
| Operating margin (%) | 12.82% | 12.02% | — | — |
| Interest | ₹1,042 cr | ₹881 cr | +18.27% | +19.22% |
| Depreciation | ₹2,375 cr | ₹2,220 cr | +6.98% | +12.13% |
| Profit before tax | ₹3,451 cr | ₹2,829 cr | +21.99% | -47.31% |
| Tax | ₹854 cr | ₹780 cr | +9.49% | -32.54% |
| Net profit | ₹2,597 cr | ₹2,049 cr | +26.74% | -50.85% |
| EPS (₹) | ₹11.70 | ₹9.23 | +26.76% | -50.84% |
Operating margin of 12.82% compares with a Commodities sector median of 18.77% across 51 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | -0.87% | -2.18% |
| Next session | -0.49% | — |
| 5 sessions | +3.34% | +4.34% |
| 15 sessions | -11.43% | — |
| 30 sessions | -12.40% | — |
Volume on the results session was 1.55× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The Bay Minette cold mill began commissioning in March, and the project remains on track for full plant commissioning in 2H CY2026.
- Oswego completed major mechanical assembly work and began cold commissioning to test equipment, connections and systems.
Guidance & outlook
- Novelis expects total cost-efficiency savings of approximately $350-400 million by the end of FY28.
- Novelis expects FY27 capital expenditures of $2.1-2.4 billion, including approximately $350 million for maintenance capex.
- Novelis expects to return to a positive free cash flow position by the end of FY27.
Planned next quarter
- Oswego's hot mill is expected to return to service in the next few weeks to support pent-up demand and normalize shipments over time.
Expansion
- The Bay Minette cold mill began its commissioning process in March.
- Bay Minette is a low-carbon, greenfield rolling and recycling facility in Alabama.
New initiatives
- Novelis delivered more than $125 million of in-year savings through its structural cost-reduction initiative in FY26.
Problems & risks
- Fiscal 2026 adjusted EBITDA was reduced by an estimated $104 million from the Oswego fires and $143 million from tariffs.
What to watch
- Whether consolidated operating margin holds above 12.82% after the Q4FY26 recovery from 12.02% in Q3FY26.
- Whether other income moves from the Q4FY26 loss of Rs 3,150 cr toward a less negative contribution to profit before tax.
- Progress against management's reported Novelis cost-efficiency savings target of approximately $350-400 million by the end of FY28.