Hindalco Industries Limited has informed the Exchange about Investor Presentation
HINDALCO · price
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Hindalco's wholly-owned subsidiary Novelis reported Q1 FY26 (quarter ended June 30, 2025) results. Net sales rose 13% YoY to $4.7 billion on higher aluminum prices, with rolled product shipments up 1% YoY to 963 kilotonnes driven by strong beverage packaging demand. However, profitability weakened: Adjusted EBITDA fell 17% YoY to $416 million, Adjusted EBITDA per tonne dropped 18% to $432, and net income declined 36% YoY to $96 million, hurt by elevated scrap prices, unfavorable product mix, and a net negative tariff impact of $28 million. Management announced an accelerated cost reduction program now expected to deliver over $100 million in run-rate savings by end of FY26 (up from earlier $75 million guidance), targeting over $300 million by end of FY28, including plant closures in Richmond and Fairmont. The Bay Minette greenfield plant in Alabama remains on track for commissioning in 2H CY2026, with $1.8 billion spent so far. Net leverage rose to 3.2x from 2.9x, with $3.0 billion in total liquidity.
Despite higher revenue, the sharp drop in per-tonne profitability and EBITDA signals near-term margin pressure for Novelis, which is the key growth driver for Hindalco. However, management's upgraded cost-saving targets and mitigation plans for tariff impact may support margin recovery from 2HFY26 onwards. Higher leverage and elevated capex of $1.9-2.2 billion for FY26 could weigh on free cash flows in the near term.