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Hindalco’s US based wholly owned subsidiary, Novelis reported a healthy performance in Q1FY27

ICICIdirect Research 06 Aug 2026 DISCLAIMER

News: Hindalco’s US based wholly owned subsidiary, Novelis reported a healthy performance in Q1FY27. Total operating income for the quarter came in at ~$5.8 billion (up 23% YoY, 21% QoQ) with shipments of flat rolled product at 916 kilo tonnes (kt) (down 5% YoY, up 9% QoQ). Adjusted EBITDA for the quarter came in at $516 million with EBITDA/tonne stood at $563/tonne (up 30% YoY & 4% QoQ). This includes positive impact of $18 million from Oswego fire insurance proceeds. Net income for the quarter stood at $164 million (vs loss of $84 million in Q4FY26).

View: The company’s delivered a resilient quarterly performance, supported by higher aluminium prices, which more than offset the impact of the 33 kt shipment loss caused by the Oswego plant fire. Additionally, lower aluminium scrap prices and ongoing cost-efficiency initiatives supported profitability. Excluding the $18 million insurance proceeds FOR Oswego fire, adjusted EBITDA/tonne remained healthy at ~$525/tonne (vs ~$514/tonne in Q4FY26 adjusting for Oswego fire and Sierre flood insurance recoveries). Looking ahead, the gradual recommissioning of the Oswego plant is expected to drive volume recovery from H2CY26, supporting stronger free cash flow generation in FY27. Further, commissioning of the 600 kt Bay Minette plant in FY28 is likely to be a key growth catalyst, driving both volume expansion and margin improvement. The company's long-term EBITDA/tonne guidance of $600/tonne remains unchanged. We continue to maintain a positive long-term view on Hindalco, as Novelis contributes ~60% of consolidated revenue and ~56% of consolidated EBITDA.

Impact: Positive

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