Hindalco Industries will remain in focus after its US subsidiary Novelis reported a consolidated net loss of $84 million for the March quarter, compared with a profit of $294 million a year earlier, as fire incidents at its Oswego, New York facility continued to weigh on performance.
The company said the decline was largely due to $630 million in pre-tax losses linked to the September and November fires at the plant. Despite the loss, net sales rose 4% year-on-year to $4.8 billion, supported by higher aluminium prices. Total rolled product shipments, however, fell 12% to 844 kilotonnes due to production disruptions at Oswego and softer demand in some specialty markets amid geopolitical uncertainty.
Citigroup maintained its Neutral rating on Hindalco with a target price of Rs 1,000. The brokerage said Novelis' free cash flow is expected to turn positive by the end of FY27, helped by an ahead-of-schedule restart at the Oswego facility and the near completion of the Bay Minette project.
HSBC reiterated its Buy rating and target price of Rs 1,310. The brokerage highlighted strong underlying earnings, describing the Oswego restart as a key positive.
Jefferies maintained a Hold rating with a target price of Rs 890. Jefferies said the fire incident continued to distort quarterly performance, although the New York plant is expected to restart in the coming weeks.
While the Oswego fires led to a sharp one-time loss, most brokerages believe the worst of the disruption is now behind the company.
Citi on Hindalco (Novelis)
- Citi maintains a Neutral rating on Hindalco with a target price of Rs 1,000.
- The brokerage expects Novelis to turn free cash flow positive by the end of FY27.
- It noted that the restart of the Oswego facility is progressing ahead of schedule, while the large Bay Minette expansion project is nearing completion.
- Citi also highlighted that FY26 cost savings exceeded management guidance, which should support profitability as operations normalize.
HSBC on Hindalco (Novelis)
- HSBC maintains a Buy rating on Hindalco with a target price of Rs 1,310.
- The brokerage said Novelis delivered a strong earnings performance.
- It views the Oswego restart as a key positive and noted that the Bay Minette project remains on track without any significant cost inflation.
- HSBC expects underlying earnings to improve further in FY27 as production ramps up and expansion benefits start to flow through.
Jefferies on Hindalco (Novelis)
- Jefferies maintains a Hold rating on Hindalco with a target price of Rs 890.
- The brokerage said the fire incident at the New York plant continued to weigh on quarterly performance.
- However, the facility restart is expected in the coming weeks, which should help normalize operations.
- Jefferies cautioned that insurance recoveries may temporarily cloud the underlying EBITDA trajectory, making it harder to assess the true earnings recovery.
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