Hindalco Q3 Results: India Business Surges, Novelis Fire Hits Profit

Introduction

Hindalco Industries, the metals flagship of the Aditya Birla Group, announced a mixed set of results for the third quarter ending December 31, 2025. While the company's India business delivered a record-breaking performance, a significant disruption at its US-based subsidiary, Novelis, weighed heavily on the consolidated bottom line. Consolidated revenue saw a healthy increase, but a substantial one-time expense related to fires at a Novelis facility led to a sharp year-on-year decline in reported net profit, illustrating the contrasting fortunes of its domestic and international operations.

Consolidated Financial Performance

For Q3 FY26, Hindalco's consolidated revenue from operations grew by 14% year-on-year to ₹66,521 crore, up from ₹58,390 crore in the corresponding quarter of the previous fiscal year. This growth was primarily fueled by strong sales in the copper segment and improved performance in value-added aluminium products within India. Consolidated Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) stood at ₹8,543 crore, a modest 5% increase from the prior year. However, the standout figure was the reported consolidated net profit, which fell by 45% to ₹2,049 crore from ₹3,735 crore a year earlier. This decline was almost entirely attributable to an exceptional expense item.

The Novelis Disruption

The primary cause for the drop in profitability was a one-time cost of ₹2,610 crore incurred by Novelis. The US-based subsidiary, a global leader in rolled aluminium products, experienced two significant fires at its Oswego plant in New York, which severely disrupted hot-mill operations and affected product shipments. The financial fallout from this incident is expected to be substantial, with management projecting a potential reduction in operating profit by as much as $100 million and a hit to free cash flow of up to $1.6 billion. Despite the operational setback and lower volumes, Novelis managed to improve its EBITDA per tonne by 6% through cost optimisation efforts. Hindalco expects to recover a significant portion of the financial impact through insurance claims.

Recovery and Timeline for Novelis

Novelis management has outlined a clear path to recovery for the Oswego facility. The hot mill is scheduled to restart operations in June 2026, with a target for the plant to return to full operational capacity during the first quarter of fiscal year 2027 (Q1 FY27). This timeline is critical for restoring normal production levels and mitigating further financial losses. The company's focus remains on fulfilling customer contracts and managing costs during this recovery phase.

India Business: The Engine of Growth

In stark contrast to the challenges at Novelis, Hindalco's India business delivered an exceptionally strong performance, aided by favourable macroeconomic conditions, higher price realisations, and sustained operational efficiencies. The India business revenue surged 23% to ₹29,264 crore. This robust showing provided a crucial buffer, helping to offset the negative impact from the Novelis disruption and other global economic volatilities.

Aluminium Segment Analysis

The aluminium segment in India was a key contributor to the strong results. The upstream business, which involves smelting, saw its revenue rise by 6% to ₹10,620 crore. More impressively, its EBITDA increased by 14% to ₹4,832 crore, driven by higher volumes and better realisations. The downstream business, which produces value-added products, also performed well. Sales volumes grew 9% to 108 kilotonnes (KT), leading to a 22% increase in revenue to ₹3,909 crore and a record EBITDA of ₹233 crore, up 55% year-on-year.

Copper Business Performance

Hindalco's copper division also posted strong top-line growth. Revenue from the copper business climbed 33% to ₹18,233 crore, largely due to higher global copper prices. Despite facing declining treatment and refining charges, the segment maintained its EBITDA at ₹595 crore, showcasing stable operational management in a challenging market environment.

Management Commentary and Future Outlook

Satish Pai, Managing Director of Hindalco Industries, stated that the company sustained its growth momentum despite global volatility. He highlighted that the all-time high performance of the India business was instrumental in offsetting the financial impact of the Oswego disruption. Looking ahead, Pai confirmed that the company's expansion plans remain on track. This includes scaling up aluminium capacity from 1.3 million tonnes to 1.7 million tonnes and increasing copper smelting capacity from 400 KT to 700 KT. Furthermore, the 600 KT Bay Minette project in the US is progressing as scheduled for commissioning in the second half of FY27.

ESG Leadership and Market Position

Beyond its financial performance, Hindalco continues to be recognized for its commitment to sustainability. For the sixth consecutive year, the company retained the highest ESG score in the global aluminium industry in the S&P Global Corporate Sustainability Assessment rankings. Ahead of the results announcement, shares of Hindalco closed at ₹965.30 on the National Stock Exchange.

Conclusion

Hindalco's third-quarter results present a tale of two distinct business segments. The resilience and record-breaking performance of its India operations underscore the company's strong domestic foundation and operational excellence. However, the unforeseen disruption at Novelis highlights the inherent risks in global operations. The company's immediate focus will be on the swift recovery of the Oswego plant and leveraging its robust Indian business to navigate the near-term financial impact. With major expansion projects on the horizon, Hindalco appears well-positioned for future growth once the temporary setbacks are resolved.