Hindalco arm Novelis Q1 net income dips 36% to $96 million; net sales up 13% at $4.7 billion

US-based Novelis Inc, which is part of Hindalco Industries Ltd, on Monday (August 11) reported a 36% year-on-year decline in net income attributable to its common shareholders to $96 million for the first quarter of fiscal year 2026.Excluding special items, net income dropped 43% to $116 million. Adjusted EBITDA fell 17% to $416 million, while adjusted EBITDA per tonne decreased 18% to $432.Net sales for the quarter ended June 30, 2025, rose 13% to $4.7 billion, driven by higher average aluminium prices and a 1% increase in total rolled product shipments to 963 kilotonnes. Higher beverage packaging shipments were partially offset by lower automotive and specialty shipments.Also Read: Hindalco arm Novelis Q3 net income falls 9% to $110 million; sales rise 4% to $4.1 billionThe decline in profitability was primarily due to restructuring charges, higher aluminium scrap prices, unfavourable product mix, and a net negative tariff impact, partially offset by higher product pricing, lower selling, general and administrative costs, favourable metal price lag, and foreign exchange gains.Net cash flow from operating activities increased 42% to $105 million, mainly due to lower net working capital, partially offset by lower adjusted EBITDA.Adjusted free cash flow recorded an outflow of $295 million compared with a $280-million outflow in the prior year, impacted by higher capital expenditures. Capex stood at $386 million, largely for strategic investments in rolling and recycling capacity, including the new Bay Minette, Alabama, plant.The company’s net leverage ratio stood at 3.2x at the end of the quarter. Total liquidity was $3 billion, comprising $1.1 billion in cash and cash equivalents and $2 billion in committed credit facilities. In June 2025, Novelis issued $400 million of tax-exempt bonds with a mandatory tender in 2032 and maturity in 2055 to fund part of the Bay Minette project.Also Read: Hindalco shares will react to a weak Novelis Q3 update post 24% fall from peakSteve Fisher, President and CEO, Novelis Inc, said, “We continue to see strong demand for aluminium beverage packaging sheet supporting topline 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 programme, which we expect will lower our cost base and improve our margins. We have already implemented a round of organisation redesign, footprint rationalisation and process improvement actions to drive simplification and efficiencies,” he added.Shares of Hindalco Industries Ltd ended at ₹676, up by ₹3.20 or 0.48%, on the BSE today (August 11).Also Read: Hindalco shares fall 8% after Novelis suspends key financial metric guidance(Edited by : Shoma Bhattacharjee)First Published: Aug 11, 2025 7:02 PM IST

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