Are you ready for the rally
Aluminium Sector
Aluminium prices reached highs near $3,500/tonne in 2022 due to energy cost surges and geopolitical factors, but then eased in 2023 as supply stabilized.
In 2025, prices are expected to average around $2,625 per tonne, with some projections up to $2,700 - $2,800, supported by growing demand from EVs and renewables but tempered by economic uncertainties and tariffs.
Long-term outlook through 2030 anticipates aluminium market growth CAGR between 3% and 6%, with price ranges depending on supply-demand balance, decarbonization trends, and new capacity bringing moderate upward price pressure.
Commodity analysts highlight potential supply deficits in the near term (2025-2026) due to production limitations and geopolitical trade factors as a key upside risk.
Globally, aluminium remains a critical metal with demand driven by industrial, automotive, construction, and clean energy transitions, supporting a positive but moderate price growth outlook for the next 5 years.Here is a summary table of aluminium prices over the last 5 years and the outlook for the next 5 years based on global market data
NALCO
National Aluminium is undertaking significant expansion in aluminium and alumina production, with an investment outlay of around ₹30,000 crore over the next five years to strengthen its position and aim for Maharatna status.
Key Expansion Projects
NALCO is setting up a new aluminium smelter with a capacity of 0.5 million tonnes per annum in Odisha, backed by an investment of ₹18,000 crore, with operations targeted to begin by FY2030.
An additional ₹12,000 crore is allocated for a 1,080 MW coal-based captive power plant to support the new smelter, ensuring stable and cost-effective energy supply.
Alumina refinery capacity will increase by 1 million tonnes per annum (fifth stream) with an investment of around ₹5,677 crore, aiming for mechanical completion by March 2026 and full ramp-up soon after.
The Pottangi bauxite mine, a critical raw material source, is set to begin operations by Q4, FY2025-26, backed by an investment of about ₹1,961 crore.
Downstream and Value-Added Product Initiatives
NALCO is entering the aluminium foil segment with an investment of ₹150–₹200 crore.scanx
A 100,000-tonne wire rod mill and enhancements for rolled product capacities are planned, with a 10% growth target for overall production and a focus on new value-added products like special grade and fused alumina.
Strategic Objectives and Impact
These expansions are part of NALCO’s strategy to push annual turnover beyond ₹25,000 crore, a key threshold for Maharatna status.
The company aims for 22.5–23 million tonnes of alumina production by FY26 and a significant increase in both domestic and export sales of alumina and aluminium.scanx
Power cost reduction by leveraging captive coal mines will further boost competitiveness and profitability.
NALCO’s wide-ranging expansion plan will make it one of India’s most forward-looking and capacity-rich aluminium producers, further strengthening its foothold in both domestic and global markets
NALCO’s expansion plans are expected to significantly boost both topline revenue and profitability over the next five years. The company is investing around ₹30,000-₹35,600 crore in capacity additions, including a new 0.5 MTPA aluminium smelter, alumina refinery expansion, and captive power plants, aiming to push turnover beyond ₹25,000 crore by 2030—up from around ₹17,000 crore currently.
Impact on Revenue
The alumina refinery’s 1 MTPA fifth stream, slated to ramp up by FY27-FY28, will increase merchant alumina sales, contributing to strong revenue growth at a projected compound annual growth rate (CAGR) of about 10-12% over the next five years.
The increased aluminium smelting capacity, combined with improved power cost structures due to captive coal mines, will further drive sales volumes and revenue, especially in domestic and export markets.
Revenue recorded a significant jump from ₹13,149 crore in FY24 to ₹16,788 crore in FY25, with the expansion expected to sustain and accelerate this growth trajectory.
Impact on Profitability
In FY25, NALCO reported a record net profit of ₹5,325 crore, a 158% increase year-on-year, driven by strong prices, operational efficiency, and early benefits from expansions.
Analysts expect earnings growth (PAT) at approximately 15% CAGR owing to margin accretive alumina sales and cost efficiencies from captive power and raw material sources.
The company’s debt-free status and strong internal accruals provide financial flexibility to fund capex without pressure, preserving profitability margins as expansions roll out.
NALCO’s focus on value-added products and global market expansions (e.g., UK market) is expected to sustain profitability through diversified revenue streams and premium pricing.
Overall, NALCO’s expansion is expected to solidify its market leadership, expand production volumes, and drive sustainable revenue and profit growth over the next five years, supporting its goal of attaining Maharatna status by 2030.
Hindalco
Hindalco Industries plans a substantial production capacity expansion over the next five years with a committed global investment of about $10 billion (around ₹82,000 crore) spanning aluminium, copper, and speciality alumina sectors.alcircle+2
Key Upstream Expansion Projects
Aluminium smelting capacity will grow with:
An 180,000 tonnes per annum (TPA) expansion at the Aditya aluminium smelter in Odisha.
A 360,000 TPA expansion at the Mahan aluminium smelter in Madhya Pradesh.
A new greenfield alumina refinery with a capacity of 850,000 TPA is under development to strengthen raw material security.wirecable+3
Copper smelting capacity will increase with a 300,000 TPA expansion at the Dahej smelter, positioning it as the world’s largest single-location copper smelter outside China.newindianexpress+2
Hindalco has secured the 12 million tonne Meenakshi coal mine to support energy needs and maintain low-cost production.economictimes+1
Downstream and New Business Initiatives
Hindalco aims to quadruple downstream EBITDA by FY30 through a mix of value-added aluminium, copper, speciality alumina, and recycling products.alcircle+2
A new battery foil manufacturing plant in Odisha with 25,000 TPA capacity (₹800 crore investment) is set to commence by July 2025 for EV battery markets.adityabirla
Construction is progressing on India’s first and the world’s second-largest dedicated e-waste and copper recycling facility at Pakhajan.hindalco+1
The US subsidiary, Novelis, is investing $4.1 billion in an expansion project at Bay Minette, Alabama, which will increase capacity to 5 million tonnes annually by 2026.angelone+1
Strategic Vision
Hindalco’s expansion will significantly boost aluminium smelting capacity by about 540,000 TPA overall, alumina refining by 850,000 TPA, and copper smelting by 300,000 TPA.
The investments aim to reinforce Hindalco’s position as the world’s lowest-cost aluminium producer and support leadership in copper and speciality alumina markets.
The focus on recycling, EV battery materials, and sustainability aligns with global demand trends and regulatory focus.
Hindalco’s aggressive expansion plan will scale up upstream capacities across aluminium and copper alongside strengthening downstream products, which is aimed at driving significant revenue and profit growth through FY30.
Key Observations
Hindalco is a much larger company, with FY25 revenue (₹2.38 lakh crore) approximately 14 times that of NALCO (~₹16,788 crore).
NALCO exhibits higher EBITDA and PAT margins (~39% and 32%), reflecting its focused upstream aluminium production and cost-efficient operations, while Hindalco’s margins are lower (~15% EBITDA, 6.7% PAT) due to diversified operations including downstream and copper businesses.
Hindalco’s absolute EBITDA and PAT are significantly higher given its size, but NALCO shows strong profitability percentages and a debt-free balance sheet, which indicates operational efficiency.
Both companies posted strong profit growth in FY25: NALCO’s net profit grew 158%, Hindalco’s PAT rose 58% year-over-year, supported by favorable macro conditions and cost optimizations.
With NALCO’s expansion plan, its topline and profitability are expected to grow substantially, but the scale will still be smaller than Hindalco’s large diversified footprint.
Technical Analysis
The picture below shows the strong momentum in Metal Sector with National Aluminium spiked by 40% while Hindalco gone up by 30% while the Sector is up by 22%
