Novelis Q1 FY 2026-27 Results: Net Income Jumps 71% To US$164 Million

Novelis, the wholly-owned subsidiary of Hindalco Industries under the Aditya Birla Group, plays a key role in the Indian company's consolidated earnings.

Novelis Q1 FY 2026-27 results reflected higher aluminium prices and improved profitability during the June quarter. Net sales increased 23% year-on-year to US$5.8 billion, while income before tax rose to US$228 million from US$146 million a year earlier. Net income attributable to common shareholders climbed 71% to US$164 million, while net income excluding special items more than doubled to US$265 million.

The company reported adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of US$516 million, up 24% from the year-ago quarter. Adjusted EBITDA per tonne shipped improved 30% to US$563, reflecting favourable metal prices, lower aluminium scrap costs and continued cost-control measures.

Novelis Q1 FY 2026-27 Results: Performance Summary

Profitability improved even as shipments declined during the quarter. The income tax provision increased to US$64 million from US$50 million a year earlier. However, cash flows remained under pressure as Novelis continued to invest in expansion. Operating cash flow recorded an outflow of US$455 million, compared with an inflow of US$105 million in the corresponding quarter last year, while adjusted free cash flow showed an outflow of US$1.13 billion.

The company spent US$775 million on capital expenditure during the quarter, largely on the Bay Minette rolling and recycling plant, compared with US$386 million a year ago. As of 30 June 2026, Novelis had US$1.1 billion in cash and cash equivalents and total liquidity of US$2.1 billion. Its net leverage ratio increased to 4.5x from 4.1x at the end of March.

Rolled product shipments declined 5% year-on-year to 916 kilotonnes, mainly due to an estimated 33-kilotonne impact from the production disruption at the Oswego facility. The Oswego hot mill resumed operations in early June, and the company said production is ramping up to meet pending customer demand and restore normal shipment levels.

Higher aluminium prices, lower aluminium scrap costs and operational efficiencies supported earnings during the quarter, although higher tariffs partly offset these gains. The company also recognised an estimated US$18 million benefit to Adjusted EBITDA from insurance proceeds related to the Oswego fire, even as it recorded US$265 million in fire-related pre-tax net losses.

Region-wise, South America reported the highest Adjusted EBITDA of US$186 million, followed by Asia (US$121 million), North America (US$111 million) and Europe (US$101 million).

Management Commentary

President and Chief Executive Officer Steve Fisher said the company started FY27 on a positive note, supported by strong execution, favourable market conditions and steady demand for sustainable aluminium products. He added that operations at Oswego are gathering pace after the restart, while the commissioning of Bay Minette is expected to strengthen Novelis' manufacturing capabilities.

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