Why is Hindalco planning a major capital expenditure in the next few years?

Hindalco has currently earmarked capital expenditure of up to $3 billion or approximately Rs.23,000 crore over the next five years. This will be across all the businesses of Hindalco and its global subsidiary Novelis. This figure was laid out by Mr. Kumara Mangalam Birla at while addressing the 62nd AGM of Hindalco. Hindalco has been one of the star performers of the last few months and has grown manifold on the back of robust demand and prices.

A major chunk of the capex allocation will be essentially deployed in the expansion of the auto-finishing lines of Novelis. This will be in their factories in the US and China as well as in enhancing rolling and recycling capacity in Brazil. In India, Hindalco has already undertaken a $1 billion expansion of the Utkal alumina and copper project. Hindalco had reported fall in net debt to EBITDA ratio from 3.83X to 2.59X giving them more room to fund capex.