Novelis Profit Rises 29% as Aluminum Prices Lift Sales, Shipments Ease

November 6, 2026

Curated by Gurdeep Singh, Amritsar, Punjab
Updated: November 6, 2026, 11:40 a.m. IST

Novelis, the wholly owned subsidiary of India’s Hindalco Industries, reported a 29% year-on-year rise in net income attributable to its common shareholder for the second quarter of fiscal 2027. The aluminium roller and recycler earned $210 million in the three months ended September 30, compared with $163 million a year earlier.

The headline improvement came alongside a softer volume picture and a sharp increase in cash use during the first half. Novelis’ revenue grew faster than shipments, reflecting higher aluminium prices and product mix, while insurance recoveries linked to the 2025 fires at its Oswego facility and lower scrap costs also helped results.

Higher metal prices lifted sales

Net sales rose 25% to $5.942 billion from $4.744 billion. The company attributed most of the increase to higher average aluminium prices: its average local market premium rose 61%, average London Metal Exchange prices increased 23%, and metal-price hedging had a favourable year-on-year impact of $23 million.

Shipments did not follow revenue higher. Rolled product shipments fell 2% to 919,000 tonnes. Higher deliveries for beverage packaging and aerospace were offset by weaker automotive and specialty-product shipments. The split matters because the sales increase largely reflected prices rather than a broad-based expansion in volumes.

Profit benefited from operating gains and insurance

Adjusted EBITDA, a company-defined measure of operating performance, rose 20% to $508 million from $422 million. Adjusted EBITDA per tonne shipped increased 23% to $553. Novelis cited lower scrap aluminium prices, improved metal mix and insurance recoveries among the factors supporting the improvement. It reported $39 million in Oswego business-interruption insurance recoveries during the quarter.

Net income excluding special items was $146 million, up 29% from $113 million. That adjusted figure helps separate the reported result from specified items, but it is not a substitute for the company’s reported net income. The quarter’s profit growth therefore combines stronger operating performance with recovery-related support; it should not be read as a pure measure of shipment growth.

By the end of the quarter, cumulative insurance recoveries related to the 2025 Oswego fires had reached $519 million. The fires also continue to affect the business: the company cited lower volume connected to the damage and a strike at its Yeongju facility in South Korea as factors weighing on shipments.

Cash flow is the main pressure point

For the six months ended September 30, net cash used in operating activities was $418 million. In the same period a year earlier, operations generated $411 million. Adjusted free cash flow was an outflow of $1.8 billion, compared with a $499 million outflow in the prior-year first half.

Novelis linked the weaker cash position to working-capital movements and effects from the Oswego fires, as well as capital expenditure for its new rolling and recycling plant in Bay Minette, Alabama. At September 30, the company reported a net leverage ratio of 4.7 times and total liquidity of $2.0 billion, made up of $1.3 billion in cash and $761 million available under committed credit facilities.

Bay Minette moves toward production

The Alabama project is a major part of Novelis’ expansion plan. The cold mill produced its first coil in September, marking a step from construction into start-up. The company is working toward beginning commercial shipments in the first quarter of fiscal 2028.

Novelis’ management expects lower capital spending as the project moves forward, together with cost discipline and underlying business conditions, to support a return to positive free cash flow and the start of a debt-reduction cycle toward the end of the current fiscal year. That is a forward-looking expectation; the timing will depend on project ramp-up, working capital, market conditions and operating performance.

What it means for Hindalco

Novelis is Hindalco’s wholly owned overseas subsidiary, so its performance is an important part of the group’s aluminium and recycling business. The latest quarter presents a mixed operating picture: higher prices and better adjusted profitability supported earnings, but shipments declined and cash flow weakened while the company funds a large expansion and manages continuing effects from the Oswego fires.

Investors assessing the results will likely watch whether Bay Minette reaches commercial shipments on schedule, whether shipment volumes recover across end markets, and whether cash generation improves as capital expenditure moderates. These indicators will help show whether the profit improvement can be sustained as one-off insurance support fades.