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Informist, Friday, Nov. 7, 2025

--Hindalco: To raise debt overseas, use it as equity infusion in Novelis 

--CONTEXT: Comments by Hindalco's management in post-earnings media call 

--Hindalco: Copper demand is strong, driven by electricals 

--Hindalco: Confident Novelis can mitigate US tariff impact in H2 

--Hindalco: See Q3 as another strong quarter for co's India ops 

By Pallavi Singhal and Rajesh Gajra

NEW DELHI – Hindalco Industries Ltd. remains confident that its US-based subsidiary Novelis Inc. will be able to mitigate the impact of recent tariffs in the second half of the current financial year, aided by increased domestic production capacity and cost-optimisation measures, its management said in a post-earnings media call Friday. 

According to management, Novelis has ramped up cold-mill capacity at its Logan plant in the US, which will largely mitigate the tariff-related hit to shipments from its Canadian units. "A large part of our tariff impact is actually production that comes from our Canadian plants into the US. We have managed to come up with more cold mill capacity at our Logan plant, and that will largely mitigate the impacts of the tariffs in the second half of this year," a company official said. 

The management added that the US administration remains supportive of domestic manufacturing, and the company continues to engage in discussions. "We are actively talking to them about short-term support," the management said.

The company also expects Novelis' strong execution pipeline and cost-reduction initiatives to further aid profitability. The company is confident that Novelis will surpass its $300-million structural cost-reduction target by FY28, with $125 million already expected by March 2026. "We are very confident that we'll actually probably blow past the $300-million target," the management said.

The management said the Bay Minette project in Alabama, which will add 600,000 tonnes of capacity in its first phase, is progressing on schedule. The plant is expected to be a "game changer" as it will provide a local supply within the US, insulating the company from tariff-related headwinds on imported metal.

Hindalco said it has not seen any negative impact from the recent US government shutdown on Novelis' operations or market demand. The company noted that, while administrative delays have affected the clearance of its AluChem acquisition, demand for its products in the US remains robust. "The only impact of the shutdown so far is that our AluChem acquisition clearance has not come through as well. But from a market point of view, demand is extremely strong. Auto demand is very strong. So we have not seen any negative impact," the management said, adding that the US economy continues to grow at a healthy pace. 

On India operations, Hindalco said domestic demand remains robust across key segments such as packaging, automotive, electrical, and litho. The company expects the December quarter to be another strong period for its Indian operations, supported by festive and industrial demand. "Indian demand is extremely strong. Post GST 2.0 and into this holiday, Diwali season, demand from most sectors—packaging, automotive, electrical, litho—all have been very strong," the management said.

The company also said copper demand remains firm, driven primarily by the electrical sector. "Our market demand is quite strong because it's driven by electricals. So there is no problem. We are producing, we are selling, no issues there," the management noted.

On the domestic copper operations, reporting a 3% on-year decline in total shipments for the September quarter, management said this was mainly due to non-rod sales, primarily cathodes. Out of the 113,000 tonnes of copper product shipments in the September quarter, 97,000 tonnes were continuous cast copper rods, it said. "So, the majority of our copper is sold as raw. We sell very little (copper) cathodes," the management said.

The company Friday reported a 21% on-year rise in its consolidated net profit to INR 47.41 billion for Jul-Sept and a nearly 14% increase in its revenue to INR 660.58 billion. Sequentially, the company's consolidated net profit rose over 18% while revenue increased by nearly 3%.

The company's stable revenue performance was led by better pricing and rising volumes in its India operations, as well as in its US subsidiary, Novelis, which reported a 10% year-on-year rise in revenue to $4.7 billion due to higher average aluminium prices. Novelis contributes about 60% of Hindalco Industries' consolidated sales.  

On Friday, shares of Hindalco Industries ended at INR 790.40 on the National Stock Exchange, up 0.3% from the previous close. End

US$1 = INR 88.66

Edited by Saji George Titus

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