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Hindalco slips 2% after arm Novelis reports Q1 results; read analysis here
However, at 9:40 AM, Hindalco share price was trading only 0.47 per cent lower at ₹668.65 per share. In comparison, the Sensex was 0.16 per cent lower at 80,735.93.
Novelis Q1 results
Hindalco's United States (US) based subsidiary Novelis released its Q1FY26 numbers on Monday, after market hours. In the first quarter ended June 2025, the company reported a 36 per cent year-on-year (Y-o-Y) decline in net income attributable to its common shareholders to $96 million, as compared to $151 million.
Its net sales for the quarter stood at $4,717 million, as compared to $4,187 million a year ago. Meanwhile, adjusted Earnings before interest tax, depreciation, and amortisation (Ebitda) stood at $416 million, down 17 per cent Y-o-Y.
Rolled product shipments was at 963 kilotonnes, up 1 per cent Y-o-Y and adjusted Ebitda per tonne shipped stood at $432, down 18 per cent Y-o-Y. Track Stock Market LIVE Updates
Hindalco Novelis management commentary
Increase in scrap prices (especially for used beverage cans) will continue to keep margins under pressure; however, the positive metal price lag from Midwest Premium movements (increased from $450 per ton to $1,500 per ton in recent months could partially offset the impact.
The company expects the US tariff on aluminum imports (particularly from South Korea and Canada) to affect Q2FY26 Ebitda by $60 million quarter-on-quarter (Q-o-Q), which may partially be offset by the US Midwest premium.
Management expects adjusted Ebitda/t to bottom out by the end of H1FY26. H2FY26 is expected to see a rise in Ebitda levels.
Management expects some tariff cost recovery to be achieved via customer discussions, although the company is avoiding renegotiating contracts mid-term to protect relationships and volumes.
The commissioning of Bay Minette will reduce the import dependency and free up other US capacities for high-margin (automotive and specialty) products.
Management does not expect any volume loss due to tariff issues – the mitigation plan is designed to protect shipments and maintain customer relationships.
Hindalco Novelis Q1 results analysis: Brokerages decode
Nuvama Institutional Equities | Buy | Target: ₹776
Management guides for net tariff impact of $60 million/quarter (assuming 50 per cent tariff on aluminium imports in the US). Despite that, with likely improvement in scrap spread and reducing production cost, management guided for Ebitda to have bottomed out in Q1FY26, the brokerage noted. Further, Nuvama shall adjust our numbers with Hindalco's Q1 earnings.
Investec | Hold | Target cut to ₹705 from ₹730
The brokerage believes tariffs headwinds impacted Novelis' performance. Further, the company's spreads have disappointed in the quarter under review and are expected to continue in this manner, according to reports.
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