A twin blow from two separate fires at its American subsidiary Novelis weighed on’s annual performance, as the company’s FY26 earnings missed Street expectations despite higher metal prices.
The Aditya Birla Group flagship reported an almost 16% drop in net profit attributable to owners to ₹13,391 crore from ₹16,001 crore in FY25. Profit fell well short of the ₹16,164 crore estimate in a Bloomberg poll of 28 analysts. In the fourth quarter, the company saw a 51% drop in net profit attributable to owners at ₹2,597 crore, down from ₹5,283 crore a year ago.
The decline stemmed mainly from ₹6,963 crore in one-off expenses linked to the Oswego plant disruption in New York last year. Operations of Novelis, a key supplier of rolled aluminium to can makers and auto companies, were affected by the fire.
Novelis accounted for 59% of Hindalco’s revenue in FY26. Hindalco reported a 15% jump in consolidated revenue from operations of ₹2,74,944 crore on the back of higher aluminium sales and moderate copper sales in the domestic market.
“We view the outage largely as a timing-related impact, with current year headwinds expected to substantially recover in the next fiscal year,” managing director Satish Pai said in a post-earnings call which discussed the fire accident.
The company reported a record India business Ebitda of ₹22,671 crore in FY26, up 6% from FY25. Novelis, however, saw Ebitda decline by 5% to ₹14,546 crore in FY26, as the fire incident shrank volumes.
In the June quarter, Hindalco expects near-term input cost escalations of about 5% sequentially due to the . However, analysts expect higher metal prices to cushion the impact.
“Earnings were largely impacted by the one-time fire incident at Novelis’ Oswego plant. The management has guided for a $1.7 billion restructuring expense, which will weigh on free cash flow, although 70–80% is expected to be recovered through insurance, limiting the long-term financial impact. With the Oswego plant set to restart, the company appears to be on a gradual path to recovery,” said Aditya Welekar, metals and mining analyst at Axis Securities.
In India, aluminium cost pressures are expected to rise in Q1 due to higher furnace oil and coal tar pitch prices, even as realizations remain firm. The near-term outlook remains steady as strong aluminium and copper prices should offset cost pressures, while operations gradually stabilize, Welekar said.
The Mumbai-headquartered company also plans a ₹12,000 crore capex in India for FY27, while Novelis capex will be $2.3-2.4 billion, mostly at Bay Minette. Bay Minette is the site of a new $5.5 billion low-carbon aluminum recycling and rolling plant being built by Novelis Inc, expected to be completed this year.
Pai said that going into FY28, it would be fair to say that Novelis capex will sharply drop once Bay Minette is commissioned, and it will go into more of a maintenance capex; however, India capex will be much higher than ₹12,000 crore because of ramp-ups in the copper smelter and other projects.
Hindalco saw a mixed trend in volumes across segments in FY26 compared to the previous year. In FY26, Novelis shipments declined to 3,557 kt from 3,757 kt in FY25, reflecting the impact of the Oswego plant disruption. Similarly, the copper business reported a marginal dip of 1% in volumes, with metal sales at 487 kt versus 491 kt a year ago. In contrast, aluminium upstream operations showed a modest improvement, with shipments rising to 1,350 kt from 1,327 kt in FY25, and downstream shipments were up 11% to 446 kt, supported by steady operational performance and capacity utilization.