Hindalco Rallies 3% As US Arm Novelis Signals Early Restart Of Facility

Mumbai, May 20:Shares of Hindalco Industries rose over3% on Wednesday after its U.S.-based subsidiary Novelis struck an optimistic tone on the recovery of its fire-hit Oswego facility, even as it raised the estimated cash flow impact from the disruption.

The stock climbed 3.5% to Rs 1,084.6 after Novelis said it plans to restart the hot mill at its Oswego plant in New York earlier than previously expected. Investor sentiment also improved after the company projected higher savings from its ongoing cost-reduction initiatives.

Fire Impact Rises to $1.7 Billion

Novelis, however, increased the estimated free cash flow impact from the Oswego fires to $1.7 billion, higher than its earlier projection of $1.3 billion-$1.6 billion. The company said the revised estimate reflects higher repair costs and additional expenses incurred to minimise disruption for customers.

Investors cheered Hindalco as US arm sounded optimistic about near term demand. Source: NSE

The Oswego facility suffered two separate fire incidents last year, severely impacting production at one of Novelis’ key aluminium rolling operations in the United States.

The company had projected a $550 million-$650 million impact on free cash flow in the wake of the first fire in September 2025. That estimate was subsequently revised higher after another fire in November.

Loss Widens Amid Lower Shipments

Novelis reported a net loss of $84 million for the March quarter, compared with a profit of $294 million a year earlier, as production disruptions from the Oswego plant weighed on operations.

Rolled product shipments declined 12% year-on-year due to operational disruptions. However, quarterly net sales still rose 4% to $4.8 billion, supported by higher aluminium prices. Adjusted operating profit fell 3% year-on-year.

Cost Savings Offer Optimism

Despite the operational disruption, Novelis said it remains optimistic about medium-term demand and expects stronger benefits from its global cost-efficiency programme.

The company exited FY26 with over $200 million in annualised cost savings and expects that figure to rise to $300 million in FY27 and further to $350 million-$400 million by FY28. It sees positive free cash flow by the end of the current financial year.

Novelis CEO Steve Fisher said the company remains confident about capturing growing demand for low-carbon and high-recycled-content aluminium products, particularly from automotive customers.

Debt Levels Remain a Concern

Investors, however, continued to monitor the company’s rising debt levels. Novelis’ net debt stood at $6.72 billion at the end of the quarter, compared with $5.18 billion a year ago and $6.2 billion in the previous quarter.

Source:

• https://www.nseindia.com/get-quote/equity/HINDALCO/Hindalco-Industries-Limited