Hindalco Industries reported impressive financial results for the quarter ended June 30, with significant growth in revenue and profit. The company also stated that US tariffs had no effect on its Indian operations during this period.

Financial Highlights

Hindalco delivered strong quarterly results with the following key metrics:

The company's aluminium upstream business maintained industry-best margins of 44%, while the aluminium downstream segment achieved record EBITDA. The copper segment maintained healthy EBITDA despite lower TC/RCs.

Novelis Performance

Novelis, a subsidiary of Hindalco Industries, reported:

• 1% growth in shipments to 963 KT
• 8% increase in beverage can volumes

Strategic Acquisitions

The board approved two key acquisitions:

1. 100% stake in AluChem Companies Inc. for $125.00 million
2. EMIL Mines and Mineral Resources Limited

Board Composition Changes

Effective August 13:

• Mr. Yazdi Piroj Dandiwala will cease as Independent Director upon completion of his second term
• Mr. Praveen Kumar Maheshwari has resigned as Whole-time Director due to personal reasons

Ongoing Investigation

The company faces an ongoing CBI investigation regarding alleged coal mine misutilization from 2014-15. The financial impact of this investigation is currently not determinable.

US Tariffs Impact

During the company's earnings call, Hindalco management stated that US tariffs had no effect on the company's Indian operations during the first quarter.

Despite challenges, Hindalco Industries' strong performance demonstrates its resilience and strategic growth initiatives across various segments of its business.

Hindalco Industries Limited's wholly-owned subsidiary, Novelis Inc., reported mixed results for the first quarter of fiscal year 2026, with revenue growth offset by a significant decline in net income.

Revenue and Shipments

The company saw a 13% year-over-year increase in net sales, reaching $4.70 billion. This growth was primarily driven by higher average aluminum prices and a modest 1% increase in total rolled product shipments, which rose to 963 kilotonnes. The increase in shipments was mainly attributed to higher demand for beverage packaging, partially offset by lower automotive and specialty shipments.

Profitability

Despite the revenue growth, Novelis experienced a substantial decline in profitability:

• Net income attributable to common shareholder decreased by 36% to $96 million
• Adjusted EBITDA fell by 17% to $416 million
• Adjusted EBITDA per tonne dropped 18% to $432

The company cited several factors for the decline in profitability:

1. Higher aluminum scrap prices
2. Unfavorable product mix
3. Net negative tariff impact of $28 million
4. Restructuring charges

These negative factors were partially offset by higher product pricing, lower SG&A costs, and favorable foreign exchange rates.

Cost Reduction Initiatives

In response to the challenging market conditions, Novelis has accelerated its cost reduction program:

• The company now expects to achieve over $100 million in run-rate cost savings by the end of fiscal year 2026, exceeding its previous target of $75 million
• Novelis aims to reach over $300 million in total savings by the end of FY28
• In Q1 FY26, the company recognized $83 million in restructuring costs related to these initiatives

Strategic Investments

Novelis continues to make progress on its strategic investments, including:

• The construction of a new greenfield rolling and recycling plant in Bay Minette, Alabama, with a 600kt capacity
• Ongoing ramp-up of recycling centers in Guthrie, Kentucky, and Ulsan, South Korea
• Commissioning of an 80kt hot mill expansion in Logan, Kentucky

Financial Position

As of June 30, 2025:

The company issued $400 million in tax-exempt bonds in June 2025.

Outlook

Steve Fisher, President and CEO of Novelis Inc., commented on the results: "We continue to see strong demand for aluminum beverage packaging sheet supporting top-line growth and the need for new capacity under construction at our plant in Bay Minette, Alabama. While market headwinds mainly from structurally higher scrap prices negatively impacted financial performance in the quarter, we are making solid progress on our comprehensive cost reduction program, which we expect will lower our cost base and improve our margins."

The company remains focused on streamlining its cost structure and investing in sustainable aluminum solutions to meet growing market demand, despite the current challenging external environment.