Novelis Q2FY26 net sales up 10% despite operational challenges

Novelis Inc., a subsidiary of Hindalco Industries, reported net sales of $4.7 bn for Q2FY26, a 10% year-over-year increase, primarily due to higher average aluminum prices. However, Adjusted EBITDA decreased by 9% year-over-year to $422m, impacted by a $54m net negative tariff and higher aluminum scrap prices. Rolled product shipments remained steady at 941 kilotonnes, consistent with the prior year, with higher automotive and aerospace shipments offsetting declines elsewhere. Net income attributable to common shareholders rose 27% to $163m.

Operational challenges included a fire at the Oswego, New York plant in September 2025, with the hot mill expected to restart in December 2025. Novelis recognized $21m in related charges in Q2FY26 and estimates a negative free cash flow impact of approximately $550-650m for FY2026, including an Adjusted EBITDA impact of $100-150m. The company expects 70-80% recovery through insurance.

Novelis is progressing with its cost efficiency program, targeting run-rate savings over $125m by the end of FY26 and over $300m by the end of FY28. The Bay Minette, Alabama plant is on track for cold mill commissioning in Q4FY26 and full commissioning in 2H CY2026, with $2.2 bn in capital expenditures incurred through Q2FY26.