Hindalco Industries delivered a strong performance in Q3FY26, with its India operations achieving record profitability despite headwinds from the Novelis Oswego plant fires. The company's earnings conference call on February 12, 2026, highlighted robust operational execution and strategic progress across its aluminum and copper businesses.

Financial Performance Overview

The company's consolidated results showed mixed performance, with strong India operations offsetting Novelis challenges. Consolidated business segment EBITDA grew 6% year-on-year to INR 8,762 crores, while consolidated profit after tax declined 45% to INR 2,049 crores due to exceptional items related to the Novelis Oswego fires.

India Business Segment Performance

Hindalco's India operations delivered exceptional results across both aluminum and copper segments. The upstream aluminum business maintained its position in the first decile of the global cost curve, achieving an EBITDA of $1,572 per ton with margins of 45%.

Aluminum Operations Excellence

The India upstream aluminum segment demonstrated resilient performance with shipments up 2% year-on-year and revenues growing 6%. Quarterly EBITDA increased 14% to INR 4,832 crores, reflecting operational excellence and cost discipline.

The downstream aluminum business continued its strong momentum with shipments up 9% year-on-year to 108 Kt. Quarterly EBITDA surged 55% to INR 233 crores, driven by higher volumes, improved product mix, and premiumization initiatives. The resultant EBITDA per ton stood at $241, marking a 35% year-on-year increase.

Copper Business Resilience

Despite challenging market conditions, the copper business maintained steady performance with overall metal shipments at 122 Kt, up 1% year-on-year. However, CCR volumes declined 14% to 82 Kt due to weaker domestic demand amid higher LME prices and elevated channel inventories. Quarterly copper EBITDA was INR 595 crores, down 23% year-on-year, primarily due to lower treatment charges and concentrate mix impacts.

Novelis Operations and Recovery Strategy

Novelís recorded adjusted shipments of 881 Kt after accounting for 72 Kt lower shipments due to the Oswego fires. The adjusted EBITDA stood at $436 million ($495 per ton), up 22% year-on-year, excluding the $54 million impact from Oswego fires and $34 million from tariffs.

The company accelerated its cost efficiency initiatives, raising the FY26 exit savings run rate target to $150 million from the previously announced $125 million. Management remains committed to the three-year goal of permanently reducing the cost structure by $300 million by FY28 exit.

Strategic Developments and Expansion Projects

Hindalco continued advancing its growth initiatives across multiple fronts. The Bay Minette 600 Kt greenfield rolling and recycling facility remains on schedule for completion in the second half of FY26. Key upstream expansion projects, including the Aditya Alumina Refinery and aluminum smelters, are progressing well and remain on schedule.

Sustainability and ESG Excellence

The company achieved significant sustainability milestones during the quarter. Hindalco scored 89 out of 100 in the S&P Global CSA 2025, the highest ever score achieved by the company, maintaining its leadership position in the aluminum industry. The company recycled 82% of total waste generated and planted 70,000 saplings across mines and plant locations.

Financial Position and Capital Structure

Hindalco maintained a strong balance sheet with net debt to EBITDA at 1.73x at the end of December 2025, well below the 2x target. During the quarter, the company's subsidiary AV Minerals raised $800 million at SOFR plus 105 basis points, with $750 million infused into Novelis as equity. An additional $200 million facility was upsized in February 2026 at the same pricing.

Market Outlook and Guidance

Management provided positive guidance for Q4FY26, expecting strong performance from the India business. Aluminum demand in India is projected to reach 1.5 million tons in Q3FY26, reflecting robust 9% year-on-year growth. The copper market showed strong momentum with domestic demand rising 10% year-on-year to 402,000 tons.

For Q4FY26, the company expects aluminum costs to increase by approximately 1%, primarily driven by higher calcined petroleum coke prices. The aluminum hedging position for Q4FY26 stands at 64% on commodity at $2,807 per ton and 26% on currency at INR 88.18 per dollar.

Hindalco Industries Limited has disclosed significant financial impacts from fire incidents at its subsidiary Novelis Inc.'s Oswego plant in New York. The aluminum major provided comprehensive updates on the incidents and their expected financial implications under regulatory disclosure requirements.

Fire Incident Details and Timeline

The Oswego facility experienced two separate significant fires affecting the hot mill area. The first incident occurred on September 16, 2025, followed by a second fire on November 21, 2025. All employees were safely evacuated during both incidents with no reported injuries. While the fires were contained to the hot mill area, all other critical assets at the facility remain operational and unaffected.

Financial Impact Assessment

Novellis has estimated the total financial impact from both fire incidents, with significant implications for free cash flow and operational performance. The company projects a total free cash flow impact of $1.3-1.6 billion before insurance recoveries. This comprehensive estimate includes expected repair costs, operational downtime, working capital timing adjustments, costs to serve customers and associated tariffs, and other recovery-related expenses.

Insurance Coverage and Recovery

The company expects substantial insurance recovery to offset the financial impact. Novelis estimates that approximately 70-80% of the free cash flow and Adjusted EBITDA impact will be recoverable through insurance coverage. However, the company has noted that insurance recovery is subject to various conditions, including insurers' rights to investigate and contest coverage, policy restrictions and sub-limits, and potential coverage disputes.

Operational Recovery Timeline

Novellis has provided a timeline for restoring full operational capacity at the Oswego facility. The estimated timeline to restart the Oswego hot mill is late Q2 calendar 2026. During the recovery period, the company is working closely with customers and leveraging its global manufacturing presence along with external suppliers to minimize customer impact and maintain service levels.

Q3 FY26 Performance Impact

The fire incidents have already affected Novelis' financial performance in Q3 FY26. The company reported net sales of $4.2 billion, up 3% year-over-year, despite operational challenges. However, total FRP shipments declined 11% to 809kt, with an estimated 72kt lower than expected shipments directly attributable to the Oswego fires.

Regulatory Compliance and Disclosure

The update was filed under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, demonstrating the company's commitment to transparent communication with stakeholders. This disclosure follows previous intimations dated September 18, 2025, October 24, 2025, November 5, 2025, and November 21, 2025, providing ongoing updates on the situation's development.