Hindalco delays two key projects as Novelis margins soften
A six-month setback at the Oswego hot mill and a slower coal mine timeline compound a 4% dip in Novelis EBITDA per ton.
— 3 earlier stories on Hindalco Industries Ltd. →What's new
- Oswego hot mill restart moves to late Q1 FY27, a six-month delay.
- Chakla coal mine box cut target slides to mid-2026.
- Novelis EBITDA per ton drops 4% to $543 amid tariff and fire costs.
Why it matters
The operational slippage at Oswego and Chakla suggests a period of friction in Hindalco's expansion plans. While record copper performance provides a temporary cushion, the reliance on a future cost-cutting program to hit long-term Novelis targets places the burden on execution.
What we're watching
- Inflationary pressure on aluminum costs expected to hit 5% in Q1 FY27.
- Any further margin volatility in Novelis due to tariff headwinds.
- Progress on the $350-400 million structural cost reduction program by FY28.
The full read
Hindalco finished Q4 with consolidated EBITDA of ₹10,812 crore, an 11% increase driven by record-high copper performance. Yet, the earnings call shifted focus to project delays and margin pressure. Management confirmed the Oswego hot mill restart is now slated for late Q1 FY27, missing previous targets by six months. Simultaneously, the Chakla coal mine box cut has been pushed to mid-2026. Novelis, a vital profit driver, saw its adjusted EBITDA per ton slip 4% to $543, hampered by fire-related costs and lingering tariff headwinds. While management reaffirmed a long-term goal of $600 per ton, that target relies on a $350-400 million cost-reduction plan stretching toward FY28. With Q1 FY27 aluminum costs expected to rise by 5%, Hindalco faces a tricky balancing act between securing its long-term structure and managing short-term operational slips. The next quarter will test whether these project timelines hold.