THEBUSINESSBYTES BUREAU

NEW DELHI, AUGUST 5, 2026

Novelis Inc, the US-based aluminium producer and subsidiary of Hindalco Industries, delivered a robust financial performance in the first quarter of FY27, with sharp gains in profitability driven by higher aluminium prices, improved cost efficiencies and lower aluminium scrap prices, even as shipments were impacted by production disruptions at its Oswego facility.

The company reported a 71 per cent year-on-year rise in net income attributable to common shareholders at $164 million. Excluding special items, adjusted net income more than doubled, surging 128 per cent to $265 million, reflecting stronger operational performance and improved margins.

Adjusted EBITDA increased 24 per cent year-on-year to $516 million, supported by lower aluminium scrap costs and sustained cost discipline across operations. The gains were partially offset by higher net tariffs. Adjusted EBITDA per tonne shipped rose 30 per cent to $563, underscoring enhanced profitability despite lower shipment volumes.

Net sales for the quarter climbed 23 per cent year-on-year to $5.8 billion, primarily driven by higher average aluminium prices. However, total rolled product shipments declined 5 per cent to 916 kilotonnes, mainly due to an estimated 33 kilotonne negative impact arising from the Oswego production disruption following the fire incident.

On the operational front, Novelis said the Oswego hot mill resumed operations in early June, marking a key milestone in restoring production capacity. The company also highlighted steady progress in commissioning critical assets at its Bay Minette plant, a strategic investment expected to strengthen its long-term manufacturing footprint and support future growth.

Cash flow remained under pressure during the quarter as the company continued to invest heavily in expansion while managing the impact of the Oswego incident. Net cash used in operating activities stood at an outflow of $455 million, primarily due to higher working capital requirements and costs associated with the Oswego fires, partly offset by insurance recoveries.

Adjusted free cash flow recorded an outflow of $1.1 billion, reflecting weaker operating cash generation and elevated capital expenditure related to the Bay Minette project, which remains one of the company's largest growth investments.

Despite the temporary cash outflows, Novelis maintained a solid liquidity position. The company's net leverage ratio stood at 4.5x at the end of the quarter, while total liquidity remained strong at $2.1 billion, including $1.1 billion in cash and cash equivalents and $1.0 billion of available committed credit facilities.

Looking ahead, Novelis expects to return to positive free cash flow in the fourth quarter of FY27, aided by continued cost discipline, higher insurance recoveries linked to the Oswego incident and a gradual moderation in capital expenditure following the Bay Minette startup. The company also expressed confidence in its deleveraging trajectory as investments normalize and newly commissioned capacity begins contributing to earnings.