Hindalco share price: Shares of Hindalco Industries climbed 4% to hit an intraday high of ₹1,089.60 on the BSE on Wednesday, May 20, after its US subsidiary Novelis reported its quarterly results and provided an update on operations at its fire-hit Oswego facility in New York.
Novelis reported a net loss of $84 million for the fourth quarter, compared with a net profit of $294 million in the corresponding period last year, as fire incidents at its Oswego plant continued to impact operations and cash flows.
The company said the decline was primarily due to pre-tax losses of $630 million linked to the September and November fire incidents at the facility. Even amid the losses, quarterly net sales increased 4% year-on-year to $4.8 billion, driven mainly by higher aluminium prices.
Novelis also announced that it plans to restart the hot mill at the Oswego facility earlier than initially anticipated. At the same time, the company said it now expects a bigger impact on cash flows from the fires, while also projecting stronger medium-term savings from its ongoing cost-reduction initiatives.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) fell 3% year-on-year to $459 million.
Novelis is a subsidiary of Hindalco Industries, an industry leader in aluminium and copper, and the metals flagship company of the Aditya Birla Group.
Novelis fire incidents
Despite the near-term impact from the Oswego fire incidents, Novelis management remained optimistic about demand trends and the company’s long-term growth outlook. The company said it remains focused on capturing rising demand for sustainable aluminium products while continuing work on operational recovery and expansion projects.
“We begin the new fiscal year energised by the strength of the underlying business and confident in our ability to capture strong market demand for high-recycled-content, low carbon aluminium,” CEO Steve Fisher said.
Novelis had reported two separate fire incidents at the Oswego unit last year. After the first fire in September, the company had estimated the impact on FY26 free cash flow at $550-650 million. Following the second fire in November, that estimate was increased sharply to $1.3-1.6 billion.
On Tuesday, Novelis further raised the estimated cash flow impact from the fires to $1.7 billion. “This increase primarily reflects higher repair costs versus our preliminary estimates and incremental costs to minimise customer disruption,” Fisher said.
Despite the company maintaining a positive operational outlook, debt levels continued to remain a concern for investors. Net debt at the end of the quarter stood at $6,724 million, compared with $5,176 million a year earlier and $6,204 million in the previous quarter.
Novelis further said it expects FY27 capital expenditure to be between $2.1 billion and $2.4 billion, including nearly $350 million towards maintenance capex. The company also stated that it expects to return to positive free cash flow by the end of the current financial year.
Hindalco Q4 Preview
Meanwhile, Hindalco Industries said in an exchange filing dated May 13 that it will announce its Q4 and FY26 financial results on Friday, May 22, followed by a conference call with investors.
Ahead of the results, Kotak Institutional Equities projected Hindalco’s India EBITDA (standalone plus Utkal) at ₹55.4 billion, up 3.6% YoY and 7.3% QoQ. The brokerage estimated aluminium EBITDA, including Utkal, at ₹48.7 billion, rising 2.8% YoY and 6.6% QoQ, aided by higher aluminium prices despite some impact from hedged volumes. Copper EBITDA is expected at ₹6.7 billion, increasing 9.2% YoY and 12.7% QoQ.
Meanwhile, Motilal Oswal expects EBITDA to decline 2.2% YoY to ₹8,640 crore and net profit to fall 21% YoY to ₹4,170 crore, while noting that strong India operations may offset weakness in Novelis caused by the Oswego fire.
Should you buy Hindalco?
Brokerages, however, continued to remain constructive on Hindalco following the latest update from Novelis.
Citi maintained a Neutral rating on Hindalco with a target price of ₹1,000. The brokerage said it expects Novelis to turn free cash flow positive by the end of FY27. Citi also noted that the Oswego facility restart is progressing ahead of schedule and that the large Bay Minette expansion project is nearing completion. In addition, it highlighted that FY26 cost savings exceeded management guidance, which could support profitability as operations normalise.
Meanwhile, HSBC retained its Buy rating on Hindalco with a target price of ₹1,310. The brokerage said Novelis delivered a strong earnings performance and viewed the Oswego restart as a key positive. HSBC also noted that the Bay Minette project remains on track without any significant cost inflation. The brokerage expects underlying earnings to improve further in FY27 as production ramps up and benefits from expansion projects begin flowing through.
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