Hindalco shares in focus as arm Novelis reports 71% jump in Q1 profit; key highlights, Oswego plant update

Shares of Hindalco Industries, the metals flagship company of the Aditya Birla Group, are expected to be in the spotlight on Thursday, August 5, following its wholly owned subsidiary Novelis’ June quarter earnings (Q1 FY27).

In its earnings release, Novelis said its net sales for the first quarter of the fiscal year 2026-27 increased 23% year-on-year (YoY) to $5.8 billion.

The increase was primarily due to higher average aluminum prices, partially offset by a 5% decrease in total rolled product shipments to 916 kilotonnes. It was driven mainly by an estimated 33 kilotonne negative shipment impact related to the Oswego production disruption from the fires in fiscal year 2026.

The company added that its net income (net profit) attributable to its common shareholders was $164 million during the quarter under review, a 71% increase from the prior-year period.

The increase was primarily due to favourable metal price lag resulting from higher metal prices, partially offset by $265 million in pre-tax net losses related to the Oswego fires.

In addition, adjusted EBITDA increased 24% year-over-year to $516 million, driven primarily by lower aluminum scrap prices and cost efficiencies, which were partially offset by higher net tariffs.

"The estimated impact from the Oswego fires on adjusted EBITDA is an $18 million benefit, as the favorable timing of insurance proceeds more than offset the estimated negative impact of production interruptions in the quarter. Net income attributable to our common shareholders, excluding special items, increased 128% year-over-year to $265 million," the press release added.

Other key details

Novelis said that net cash used in operating activities was an outflow of $455 million in Q1 FY27, compared to a net cash inflow of $105 million in the corresponding quarter of the previous fiscal year, largely related to higher working capital from rising aluminum prices and impacts from the Oswego fires, net of insurance recoveries.

Adjusted free cash flow was an outflow of $1.1 billion in the current year period, compared to the year-ago period outflow of $295 million.

The reduction in adjusted free cash flow is mainly driven by lower operating cash flow, as well as higher capital expenditures related to the Company's US greenfield rolling and recycling plant in Bay Minette, Alabama, which has begun the commissioning process, the company added.

Net leverage ratio

The company had a net leverage ratio (Adjusted Net Debt / trailing twelve months (TTM) Adjusted EBITDA) of 4.5x at the end of the first quarter of fiscal year 2027. Total liquidity stood at $2.1 billion as of June 30, 2026, consisting of $1.1 billion in cash and cash equivalents and $1.0 billion in availability under committed credit facilities.

What the CEO said

"We are pleased to start the new fiscal year on a positive note, supported by strong execution, favorable market trends and continued demand for sustainable aluminum solutions," said Steve Fisher, president and CEO, Novelis Inc. "Momentum continues to build, buoyed by the successful restart of the Oswego hot mill in early June. At the same time, the initial commissioning of key assets at Bay Minette represents another important step in strengthening our operational capabilities and positioning Novelis for its next phase of growth."

Update on recovery at Oswego plant

Novelis stated that in September 2025, a fire broke out at its plant in Oswego, New York. In November 2025, a second significant fire occurred at the Oswego plant in a location where repair work from the September fire was taking place. Everyone working at the plant was safely evacuated, and there were no injuries to employees, contractors, or first responders during either event. Both fire events were contained to the hot mill area and did not impact the rest of the plant.

"The Oswego hot mill restarted operations in early June, and production activities are ramping up to support pent-up demand and normalise shipments," it added.

About Novelis

Novelis Inc. is a global aluminium producer and the world's largest aluminium recycler. The company manufactures aluminium products for industries including automotive, aerospace, beverage packaging and specialty applications across North America, Europe, Asia and South America.

Novelis reported net sales of $18.4 billion in FY26 and is a wholly-owned subsidiary of Hindalco Industries, the metals flagship of the Aditya Birla Group. It is headquartered in Atlanta, Georgia, USA.