Hindalco Sees Recovery in Novelis Earnings as FY27 Outlook Improves

Hindalco Industries Forecasts Strong Earnings for Novelis and Domestic Aluminium Business

Hindalco Industries, one of India's largest aluminium and copper producers, is expecting its unit Novelis to deliver earnings of approximately $500 per tonne in fiscal 2027. This forecast comes on the back of strong demand across its Indian aluminium and copper businesses, a senior executive revealed on Monday.

The U.S. unit, Novelis, which contributes around 60% of Hindalco's revenue, reported adjusted EBITDA of $462 per tonne for fiscal 2026. However, the Oswego plant in New York was affected by fire-related disruptions, resulting in a one-time charge of 41.71 billion rupees ($437.59 million) in the fourth quarter of fiscal 2026.

Despite the disruptions, Hindalco's managing director, Satish Pai, expressed confidence in retaining customers, including automaker Ford. He stated that the worst is over for Novelis and that the company is well-positioned to capitalize on strong demand.

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Hindalco benefited from firmer metal prices and seasonal demand in fiscal 2026. However, the Middle East conflict has raised input costs and tightened supplies, with prices increasing for Furnace Oil and CP Coke (Calcined Petroleum). These price hikes are expected to correct once the Strait of Hormuz opens and commodity fuel prices decrease.

Raw material costs are expected to rise by another 5% in the coming quarters, according to Pai. Despite this, Hindalco is forecasting high double-digit growth in its domestic aluminium downstream business this fiscal year. This growth is driven by the ramp-up of its new rolling facility, Aditya FRP, and expansion into higher-value products such as EV components and construction materials.

In the copper business, Hindalco expects quarterly EBITDA of 6 billion rupees to 7 billion rupees. Earnings are seen remaining resilient due to downstream products and precious metals, despite weak treatment and refining charges.

India's dependence on imported refined copper is expected to continue, although the country aims to eliminate this reliance within two years through capacity additions and recycling. However, dependence on imported copper ore is likely to persist despite efforts to boost domestic exploration and secure long-term supply deals.

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