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INVESTMENT INSIGHTS

Check Before You Invest : Hindalco Industries Ltd

BSE: 500440 NSE: HINDALCO ISIN: INE038A01020
  |   Sector:  Metals & Mining   |   Industry:  Metal - Non Ferrous

Snapshot

Q.1 Which industry/sub-sector does Hindalco Industries Ltd belong to?
Hindalco Industries Ltd belongs to the Metals & Mining sector, operating specifically within the Metal - Non Ferrous segment.
Q.2 Is Hindalco Industries Ltd a good quality company?
Hindalco Industries Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Hindalco Industries Ltd undervalued or overvalued?
Hindalco Industries Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 16.35 11.03
Price to Book 1.6 1.35
Price to Sales 0.8 0.67
EV to EBITDA 7.96 7.04
Q.4 Is Hindalco Industries Ltd a good buy now?
Hindalco Industries Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Hindalco Industries Ltd?
Hindalco Industries Ltd revenue growth is 15.3% for FY-2026, which is in line with its 5-year CAGR of 15.81%, indicating stable growth.

Q.2 Gross Profit margin of Hindalco Industries Ltd?
Hindalco Industries Ltd Gross profit margin which is the profit after deduction of direct costs, is 12.5% for FY-2026, which is in line with its 5-year median of 12.5%, indicating stable margins.

Q.3 Operating Profit Margin of Hindalco Industries Ltd?
Hindalco Industries Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 13.64% for FY-2026, which is in line with its 5-year median of 13.47% indicating stable margins.

Q.4 Net Profit Margin of Hindalco Industries Ltd?
Hindalco Industries Ltd Net Profit Margin is 4.87% for FY-2026, is in line with its 5-year median of 4.87%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 12.5 12.5
Operating Profit Margin (%) 13.64 13.47
Net Profit Margin (%) 4.87 4.87

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Hindalco Industries Ltd?
Hindalco Industries Ltd Return on Asset is 4.4%, which is in line with its 5-year historical median of 4.53%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Hindalco Industries Ltd?
Hindalco Industries Ltd Return on capital employed is 10.45% for FY-2026, which is below its 5-year historical median of 11.16%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 11.25%, indicating value preservation.

Q.7 Return on Equity (ROE) of Hindalco Industries Ltd?
Hindalco Industries Ltd Return on equity is 10.26% for FY-2026, which is below its 5-year historical median of 11.65%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Hindalco Industries Ltd?
Hindalco Industries Ltd Cash conversion cycle is 35 days, above its 5-year historical median of 30 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.9 0.95
ROE (%) 10.26 11.65
ROCE (%) 10.45 11.16
Cash Conversion Cycle 35 days 30 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Hindalco Industries Ltd?
Hindalco Industries Ltd Debt-to-Equity ratio is 0.71, which is above the industry average of 0.39, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Hindalco Industries Ltd?
Hindalco Industries Ltd Debt to cash flow from operations is 9.43, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Hindalco Industries Ltd?

Q.1 Promoter shareholding and pledge status of Hindalco Industries Ltd?
Promoters hold 34.66% of the Hindalco Industries Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Hindalco Industries Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Hindalco Industries Ltd vs industry peers?
Hindalco Industries Ltd revenue CAGR is 15.81%, compared to the industry median CAGR of 12.43%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 15.3 12.4
Gross Profit Growth (%) 10.3 11
Operating Profit Growth (%) 8.8 13.4
Net Profit Growth (%) -16.3 11.4
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.9 0.85
ROE (%) 10.26 27.59
ROCE (%) 10.45 21.29
Cash Conversion Cycle (days) 35.16 9

Valuation & price assessment

Q.1 Stock return of Hindalco Industries Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 21.8% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 21.8% 16.9% 28.9% 45%
Q.2 Valuation ratios of Hindalco Industries Ltd vs historical?
The current P/E ratio of 16.35 is higher than its historical median of 11.03, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings 16.35 11.03 27.16
Price to Book 1.6 1.35 2.29
Price to Sales 0.8 0.67 0.62
EV to EBITDA 7.96 7.04 12.16

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