Hindalco to deliver a robust show, Novelis will turn around in FY27: Satish Pai

Hindalco Industries‘ performance in the ongoing quarter will be better than the last quarter of FY26, and the next fiscal will mark the turnaround of its US arm Novelis, managing director Satish Pai told Nikita Periwal in an interview. Pai also said aluminium prices are likely to remain elevated at least until the end of 2026. Edited excerpts:

How much of Hindalco’s India business performance is driven by structural factors and how much is cyclical?

The upstream business for any commodity is driven by LME (London Metal Exchange)… Our profitability rose proportionately with the gains in LME, but our aluminium downstream business is not linked to LME and still had a great quarter. For copper, it was because of sulphuric acid and the downstream business. So, a part of it is related to pricing, but for manufacturing companies, a large part of it is also how well you run your operations and take care of your customers. Therefore, both factors have to be given credit.

How sustainable are these numbers?
The first quarter of FY27 will be better than the fourth quarter of FY26. We feel that prices will be in the range of $3,400-$3,500 per tonne at least up to the end of 2026. About 2.5-3.0 million tonnes of aluminium have gone off the market because of the West Asia crisis, and it will take six months to get these back online.

Between the higher prices of aluminium and higher input costs, what will profitability look like?
Commodity prices are much higher compared with our cost of production, so it is safe to say fiscal 2027 is going to be much stronger. The first three quarters of this year are going to be very strong.

Will the company’s performance in India overshadow that at Novelis?
Fiscal 2027 will be the turnaround year for Novelis-one, because of Oswego, which will restart next week, and the other reason is the commissioning of the hot mill in Bay Minette. Once these two are done, deleveraging will start from FY28. Ebitda will also start to stabilise at around $500 per tonne on a consistent basis. Next year, even if LME corrects, Novelis will be back. This year is a positive inflection point for Novelis.
Will the IPO for Novelis be planned by FY28?
No. The only focus for Novelis is the restart of Oswego and the full commissioning of Bay Minette.
Do you think the fires at Oswego have impacted investor sentiment for Novelis?
We have done some analysis to make sure this does not happen again. But what the fires have shown the market and the customers is that companies like Novelis have an advantage because they have scale. We have managed to keep supplying Ford Motor because of our worldwide presence and scale.