Hindalco Industries reported a strong Q4 performance with record upstream aluminium EBITDA and robust margins, while ...
What Satish Pai said
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Satish Pai, Managing Director of Hindalco, discussed the company's record Q4 FY26 results and outlook for FY27. He highlighted that upstream aluminum EBITDA of 5,448 crore at 48% margins was the highest ever, driven by macro factors and strong operational performance. Pai expects Q1 FY27 margins to be better than Q4 due to higher LME prices. He addressed the Aditya FRP plant ramp-up, expecting stabilization in H1 FY27 and downstream EBITDA per ton in the 250-300 range. For Novelis, he emphasized the restart of Oswego in early June and Bay Minette commissioning in Q3 FY27 as key drivers. He confirmed insurance recovery of 70-75% of the $1.7 billion fire impact over 18 months. Pai projected Novelis turning cash flow positive by Q4 FY27, with net debt to EBITDA between 4.1-4.5 times until then. He noted specialty demand remains flat due to interest rates.
Key takeaways
Q1 FY27 margins will be better than Q4 FY26 due to higher LME prices.
Oswego restart expected in first week of June, with normal capacity by Q2 FY27.
Bay Minette commissioning on track for H2 CY2026 with no cost escalation so far.
Novelis to turn cash flow positive by Q4 FY27, with net debt to EBITDA between 4.1-4.5 times until then.
Insurance recovery of 70-75% of $1.7 billion fire impact over 18 months.
4:00And now with the commissioning expected to happen in June, will shipments completely normalize in quarter two of FY27?
4:23And have insurance proceeds for Oswego fire already been received by the company, and will the claim also include loss of profit led by lower shipments, too?
4:55And do you foresee any risk in meeting the commissioning timeline of the second half of calendar year 2026 that you've earlier given?
5:30Is it a big headwind for you as we head into FY27? Could that be a concern?
6:15Now, given that some of Bay Minette capex is still to be incurred, what makes you confident of turning cash flow positive in FY27 itself?
7:10Pai, from 4.1 times net debt to EBITDA for Novelis as on 31st March, how much could the leverage increase by, given that Bay Minette capex is still underway like you were talking about?
Welcome back. You're still tuned into Midcap Masala right here on ET Now. And as promised, let's put the spotlight on Hindalco. This counter reported its numbers on Friday. We had Novelis, which reported its numbers on Wednesday, and that counter also reported a big beat as compared to expectations. And even when we talk about standalone numbers, aluminum upstream EBITDA reported a strong growth of about 13%. EBITDA per ton for upstream EBITDA rose by about 4% on a year-on-year basis. This is the highest ever that the company has ever reported. And as far as downstream EBITDA is concerned, we saw some bit of weakness over there. But we now have the management joining us, managing director of the company, Mr. Satish Pai. Mr. Pai, afternoon. Thank you so much for joining us today. And first up, let's talk about the strong set of numbers that you have reported. What kind of thoughts do you have on aluminum upstream EBITDA, which was the highest ever that you've reported so far?
So firstly, as you said, 5,448 crores upstream EBITDA at 48% margins are probably the highest Hindalco has ever had. Now, I do want to emphasize that these margins are of course driven by macro and LME, but you also have to take into account the very strong operational performance that the Hindalco smelters and refineries did. Going forward, if you look at Q1, the LME prices are already above quarter four. Of course, some amount of inflation of cost is happening. But it would be fair to say that our margins in Q1 will be better than in Q4.
Okay, that sounds good. Mr. Pai, we have spoken about the upstream EBITDA. Let's talk about aluminum downstream EBITDA per ton. That has declined by 6% as Aditya FRP plant is ramping up to its optimal levels. How soon will this plant ramp up be completed? And what will be the normalized EBITDA per ton? Then what would that be for the aluminum downstream business?
So the Aditya FRP is as you said ramping up. I think by the first half of this year a large part of the operations would have stabilized there. I think that you know if the demand holds good, we should be in that 250 to 300 EBITDA range. I think we exited at about 220 to 250. So the downstream EBITDA per ton we are hoping next year with the full ramp up will be better.
Mr. Pai, let's also talk about Novelis because that reported strong Q4 despite the fire incident and its impact on shipments. One of the reasons was also improving scrap spreads. How much benefit will you enjoy as a result of improving scrap spreads as we head into the first half of FY27?
So I think that you know scrap spreads as you rightly said have been quite good. Also the LME and Midwest premiums have been good. So the scrap benefit has been good. But I think that what we are really counting upon for improvement in Novelis performance in FY27 is the restart of Oswego because once that plant starts we will be fully delivering auto out of Oswego. And we are also looking forward to the start of the commissioning of Bay Minette in the quarter three of this year. I think for me these two are the biggest and most impactful points for Novelis going forward.
Right, Mr. Pai, you did mention the Oswego plant and that was earlier estimated to start at the end of June. Now it is expected to start in just a few weeks. How soon could it be? Can you help us with the timeline? Could it be in the first week of June itself?
Yes. Our expectation is that within two months of the plant startup, we have to do a little bit of requalification, but yes, by the second quarter Oswego should be back to its normal capacity.
And have insurance proceeds for Oswego fire already been received by the company, and will the claim also include loss of profit led by lower shipments, too?
Yes, I think the insurance claim will cover all of that. We have been on record to say that the total impact of the fire has been about 1.7 billion, and that we will recover roughly 70 to 75% of that. The process will take about 18 months is also what we have communicated.
13 more exchanges in this transcript
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Pai, S. (2026, May 25). Hindalco Delivers RECORD EBITDA! Satish Pai Sees Stronger Q1 Ahead | Q4 Earnings Update | ET Now [Interview transcript]. ET Now. CEOInterviews.AI. https://ceointerviews.ai/interview/1148432/
MLA
Satish Pai. "Hindalco Delivers RECORD EBITDA! Satish Pai Sees Stronger Q1 Ahead | Q4 Earnings Update | ET Now." ET Now, 25 May. 2026. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/1148432/.
BibTeX
@misc{pai2026_1148432,
author = {Satish Pai},
title = {Hindalco Delivers RECORD EBITDA! Satish Pai Sees Stronger Q1 Ahead | Q4 Earnings Update | ET Now},
howpublished = {Interview transcript, ET Now. CEOInterviews.AI},
year = {2026},
month = {may},
url = {https://ceointerviews.ai/interview/1148432/},
note = {Speaker-attributed transcript with timestamps}
}
