Aluminium Producers
W Asia crisis to drive profitability of domestic aluminium producers, says Crisil
This story was originally published at 14:48 IST on 1 June 2026
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NEW DELHI – The ongoing crisis in West Asia is likely to drive the profitability of three primary aluminium manufacturers in India, with their average earnings before interest, tax, depreciation, and amortisation per tonne expected to reach a decadal high of over $1,450 in the financial year 2026-27 (Apr-Mar), Crisil Ratings Ltd. said in a press release Monday.
The increase in profitability will be driven by improvement in realisations for Vedanta Aluminium Metal Ltd., Bharat Aluminium Co. Ltd., and Hindalco Industries Ltd., on elevated aluminium prices owing to a global aluminium supply deficit, according to the rating agency. Vedanta Aluminium Metal, Bharat Aluminium, and Hindalco Industries account for about 90% of India's 4.6 million tonne aluminum manufacturing capacity, as per Crisil.
Cost efficiencies of domestic producers will be underpinned by highly integrated operations, including captive power, alumina refinery, and bauxite linkages. These factors, along with healthy capacity utilisation, will lead to robust cash accruals and keep credit profiles strong, the press release said.
In 2025, the Gulf Cooperation Council accounted for 8.3% of global aluminium production. However, strikes on critical smelting infrastructure, compounded by gas supply shortages, have disrupted Gulf Cooperation Council supply by 40–50%, as per the press release. This could widen the global supply deficit to a decadal high of 1.5 million tonnes – 2.0 million tonnes during the year.
The supply shock has led to London Metal Exchange aluminium prices rising to a decadal high of above $3,500 per tonne since the onset of the West Asia conflict in February 2026, according to the rating agency. This puts Indian primary producers in a sweet spot, as their realisations are benchmarked to London Metal Exchange prices, while their costs remain among the lowest globally, with the majority of smelting capacities operating in first quartile of global cost curves, the rating agency said.
"The key advantage Indian producers hold in this milieu is their self-sufficiency in key raw material availability for primary aluminium production. Unlike Gulf Cooperation Council smelters, Indian players rely mainly on domestically sourced raw materials like coal and bauxite. Thus, a sharp increase in realizations will push operating margins of Indian primary aluminium producers above $1,400-1,500 per tonne this fiscal — well above the decadal average of ~$560 per tonne," Ankush Tyagi, director, Crisil Ratings, said.
For the March quarter, Vedanta's consolidated net profit was INR 66.98 billion on revenues of INR 246.09 billion. At 1420 IST, shares of the company traded 3.7% lower at INR 339.75 on the National Stock Exchange. Hindalco reported a net profit of INR 25.97 billion on revenue of INR 781.33 billion for the March quarter. At 1422 IST. shares of Hindalco traded over 1% higher at INR 1139.40 on the NSE. End
US$1 = INR 94.98
Reported by Astha Oriel
Edited by Avishek Dutta
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