Hindalco shares drop 4% after Q3 results. Should you buy, sell or hold?

Hindalco Industries shares fell 4% to Rs 926.65 on Friday after the company reported a 45% year-on-year drop in consolidated net profit for the December quarter, which stood at Rs 2,049 crore. Following the results, Citi downgraded the stock from “Buy” to “Neutral,” while raising its target price to Rs 1,000 from Rs 920.

The Aditya Birla Group flagship reported consolidated net profit of Rs 2,049 crore in Q3FY26, down from Rs 3,735 crore in the year-ago period. Revenue from operations rose 14% year-on-year to Rs 66,521 crore, compared with Rs 58,390 crore in Q3FY25.

On a sequential basis, profit after tax declined 57% from Rs 4,741 crore in Q2FY26, while revenue edged up 0.7% from Rs 66,058 crore in the previous quarter. Consolidated PAT before exceptional items stood at Rs 4,051 crore, up 8% year-on-year. The company reported an exceptional item of Rs 2,610 crore during the quarter. EBITDA rose 5% to Rs 8,543 crore.


Segment-Wise Q3 Performance

In its Novelis segment, revenue stood at $4.2 billion, up 3% year-on-year, driven by higher metal prices. Adjusted EBITDA, however, declined 5% to $348 million due to lower volumes, tariffs, and disruption from the Oswego fires. The company said its Bay Minette and other strategic investment projects are progressing well, and the Oswego plant is expected to restart its hot mill in Q1FY27.

In the aluminium downstream business, sales rose 9% to 108 KT, while revenue increased 22% to Rs 3,909 crore. EBITDA in the segment improved 55% to Rs 233 crore, aided by higher shipments and a favourable product mix.

In the copper business, metal sales increased 1% to 122 KT, while Copper Continuous Cast Rod (CCR) sales fell 14% to 82 KT due to weak domestic demand amid higher LME prices and elevated channel inventories. Copper revenue rose 33% to Rs 18,233 crore, driven by higher prices.

On Thursday, Hindalco shares ended nearly flat, slipping 0.17% to close at Rs 964.40 on the NSE.

Brokerage view

Citi has downgraded Hindalco Industries to “Neutral” from “Buy,” while raising its target price to Rs 1,000 from Rs 920.

The brokerage noted that Novelis’ EBITDA has been impacted by the Oswego fire, with the recovery timeline remaining uncertain. However, it highlighted that the Indian aluminium business continues to demonstrate strong performance.
Citi added that higher leverage and potential cash flow risks are offsetting the structural bullish outlook on aluminium. As a result, it believes the risk-reward is now evenly balanced, leading to the downgrade to Neutral.

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