Shares of surged nearly 4 per cent on Wednesday, recovering from a weak opening, as investors weighed mixed brokerage views on subsidiary Novelis despite the company reporting a loss linked to fire incidents at its Oswego plant in New York. Optimism around a faster-than-expected restart at the facility, improving free cash flow outlook and progress on the Bay Minette expansion project lifted sentiment in the stock.
The stock climbed to ₹1,089.50 from the previous close of ₹1,048.30, after opening lower at ₹1,038.40 in early trade.
Stock movement after Novelis results
Novelis, the wholly-owned subsidiary of Hindalco Industries, reported a consolidated net loss of $84 million for the quarter ended March 31, 2026, compared with a net profit of $294 million in the year-ago period. The company said the decline was primarily due to $630 million in pre-tax net losses related to fires at its Oswego facility.
Despite the loss, consolidated net sales rose 4 per cent y-o-y to $4.79 billion from $4.59 billion a year earlier, driven by higher aluminium prices. Total rolled product shipments, however, declined 12 per cent y-o-y to 844 kilotonnes due to production disruptions at Oswego and weaker demand in certain speciality markets amid geopolitical uncertainty.
Brokerage views
HSBC retained a buy call on the stock with a target price of ₹1,310. The brokerage said Novelis delivered a strong earnings performance and viewed the Oswego restart as a major positive. It added that the Bay Minette project remains on track without meaningful cost inflation and expects underlying earnings improvement in FY27 as production ramps up.
Citi maintained a neutral call on Hindalco with a target price of ₹1,000. The brokerage said Novelis is expected to turn free cash flow positive by the end of FY27 and noted that the Oswego facility restart is progressing ahead of schedule. It also highlighted that the Bay Minette expansion is nearing completion and FY26 cost savings exceeded management guidance.
Jefferies maintained a hold call with a target price of ₹890. The brokerage said the Oswego fire incident continued to weigh on quarterly performance, though the expected restart in the coming weeks should help normalise operations. It cautioned that insurance recoveries could temporarily distort the EBITDA trajectory and make the earnings recovery harder to assess.
Domestic brokerage JM Financial said Novelis reported adjusted EBITDA of $459 million in 4QFY26, ahead of its estimate of $356 million, though it termed the beat largely optical because around $577 million of fire-related losses were booked below the EBITDA line. The brokerage said EBITDA per tonne improved q-o-q to $544 per tonne from $430 per tonne in 3Q despite operational disruptions and softer speciality demand.
JM Financial added that the adverse free cash flow impact from Oswego has been revised upwards to $1.7 billion from the earlier estimate of $1.3-1.6 billion, with 70-75 per cent expected to be recovered through insurance. The brokerage maintained a buy call and said Bay Minette commissioning remains on track for the second half of CY26, while Novelis expects free cash flow recovery by the end of FY27.