Cumulative tree plantation crossed 6.3 million trees.
Decarbonization & Energy
Aluminium specific GHG footprint: 19 tons of CO2 per ton of aluminium, lower YoY.
Current Renewable Energy (RE) capacity: 470 MW (solar, wind, hydro).
RE capacity addition on track: 414 MW of solar/wind and 90 MW of RE RTC pump storage to be added in FY27.
Expected RE portfolio by end-FY27: 884 MW solar/wind/hydel + 125 MW RE RTC capacity.
Growth Projects & Capex
Novelis Bay Minette (600 KT facility): On track for completion in FY27; initial commissioning underway.
India Upstream Expansions (Aditya Alumina refinery, smelter expansions): Progressing well and on track.
Captive Coal Mines (Chakla, Bandha, Meenakshi): Development progressing; Chakla expected to contribute ~1 million tons in FY28, Bandha ~0.5 million tons from mid-FY28.
Downstream Projects: Aditya FRP plant ramping up; Aditya battery foil and Taloja AC Fins facilities commissioned in Q1; customer qualification underway. Specialty alumina (precipitated hydrate) facility advancing through customer approval.
Copper Projects: Smelter expansion, e-waste recycling, and Inner Grooved Tubes project progressing as planned.
FY27 is a high capex year for the India business; net debt-to-EBITDA not expected to change materially in the near term.
Royalty Agreement Disclosure
A new brand royalty agreement was disclosed in the Novelis 10-Q filing.
The Aditya Birla brand is owned by Birla Group Holdings Private Limited (BGH), which had not charged royalty historically.
Hindalco and Novelis will each pay a royalty to BGH capped at INR 225 crores per annum.
For Hindalco, this will be disclosed as a Related Party Transaction in biannual Exchange filings per SEBI LODR, due in October.
Management stated this payment is not material to capital allocation or dividend policy.
Insurance Recovery for Novelis Oswego Fire
Cumulative cash flow impact net of recoveries stood at USD 1.4 billion as of Q1 end.
Total insurance recoveries are expected; net cash impact after all recoveries is estimated to be USD 600 million.
Steady recoveries are expected in FY27, with a couple hundred million potentially extending into FY28.
Market Outlook & Commentary (as provided by management)
Global Aluminium Market: Expected deficit of 1 million tons in CY26. Q1 CY26 global production was 18 million tons (down 1% YoY), while consumption was 19 million tons (up 1% YoY).
Indian Aluminium Demand: Estimated at ~1.5 million tons in Q1 FY27, up ~3% YoY. Flat rolled products demand grew >10% YoY.
Copper Concentrate Market: Remains challenging with tight availability; Treatment Charges/Refining Charges (TC/RCs) were negative (between -26 to -30 cents per pound).
Macro Environment: Discussed IMF global growth projections, RBI's FY27 India GDP growth projection of 6.7%, and expected inflation of 5%.
Q&A Session Key Points
Novelis Tariffs: A USD 70 million tariff impact was recorded in Q1 due to supply chain reconfiguration post-Oswego fire, requiring more imports into the U.S. This impact is expected to persist for the next couple of quarters but reduce as operations normalize.
Volume Recovery: Volumes in aluminum downstream and copper are expected to be higher in Q2 FY27.
Copper Backward Integration: The company is evaluating one copper exploration block in India and looking at opportunities domestically and in neighboring countries. 85% of concentrate requirements are locked in.
Copper Recycling Project: The e-waste recycling project has an IRR in the high teens.
Aditya Smelter Expansion: The first phase (180 pots) is expected in December 2027; the second phase in December 2028. The company will remain a net seller of ~800 KT of alumina.
