Hindalco: Oswego fire hits Novelis cash flows; analyst views on stock ahead of Q3 results
Hindalco shares fell 2.3 per cent to hit a low of Rs 943.45 apiece on BSE. The aluminium and copper major, and a subsidiary of the Aditya Birla Group, is scheduled to report its December quarter results later in the day.
- Feb 12, 2026,
- Updated Feb 12, 2026 9:31 AM IST
The extended restart timeline at Novelis’ Oswego plant and a weak set of results dragged Hindalco Industries Ltd shares down over 2 per cent in Thursday’s trade. The impact of the fire incidents at the US plant is expected to spill over into H1 2026. The Oswego hot mill is now seen restarting late in the second quarter of calendar 2026, compared with the December 2025 quarter earlier, followed by a gradual ramp-up and customer requalification process.
Following the development, the Hindalco stock fell 2.3 per cent to hit a low of Rs 943.45 apiece on BSE. The aluminium and copper major, and a subsidiary of the Aditya Birla Group, is scheduled to report its December quarter results later in the day.
MOFSL noted that the total estimated free cash flow impact is $1.3-1.6 billion, reflecting restoration capex, working capital strain, and operational disruption. Novelis recorded $327 million of Oswego fire-related exceptional costs in Q3, which included repairs, cleanup, idle costs, and customer fulfillment expenses.
JM Financial has revised upward its Hindalco's consolidated EPS estimates by 10 per cent for FY27 and 17 per cent for FY28, driven by higher LME prices, even as it revised Novelis earnings downwards. This brokerage maintained 'Buy' on the Hindalco stock.
"Full-year Ebitda impact is estimated at $150-200 million, primarily from lost contribution and unabsorbed fixed costs. Insurance coverage is expected to recover 70-80 per cent of total fire-related losses, significantly mitigating long-term economic impact," MOFSL said.
To recall, Novelis faced two separate fire incidents at the Oswego facility in September 2025 and November 2025. The September fire incident largely affected the roof, while the November incident affected floor-level machinery and cabling. This is materially extending the restoration costs and restart timeline.
Nuvama said even as it has raised its target of Hindalco Industries to Rs 923 from Rs 838 earlier, it awaits lower prices to re-enter the stock. The stock settled at Rs 966.60 apiece on Wednesday.
"The adverse impact of fire at Oswego plant is likely to continue until Q2FY27. Management estimates total impact of $1.3–1.6 billion on cashflows (70–80 per cent is recoverable, which can be questionable). With adverse impact of fire to be over by Q2FY27, core Ebitda per tonne of $495 provides earnings visibility H2FY27 onwards," it said.
MOFSL said it sees the fire incident impact spilling into H1CY26 as a negative development, nut expects the impact on the Hindalco stock price to be limited, with the market broadly seeing it as a one-off.
The extended restart timeline at Novelis’ Oswego plant and a weak set of results dragged Hindalco Industries Ltd shares down over 2 per cent in Thursday’s trade. The impact of the fire incidents at the US plant is expected to spill over into H1 2026. The Oswego hot mill is now seen restarting late in the second quarter of calendar 2026, compared with the December 2025 quarter earlier, followed by a gradual ramp-up and customer requalification process.
Following the development, the Hindalco stock fell 2.3 per cent to hit a low of Rs 943.45 apiece on BSE. The aluminium and copper major, and a subsidiary of the Aditya Birla Group, is scheduled to report its December quarter results later in the day.
MOFSL noted that the total estimated free cash flow impact is $1.3-1.6 billion, reflecting restoration capex, working capital strain, and operational disruption. Novelis recorded $327 million of Oswego fire-related exceptional costs in Q3, which included repairs, cleanup, idle costs, and customer fulfillment expenses.
JM Financial has revised upward its Hindalco's consolidated EPS estimates by 10 per cent for FY27 and 17 per cent for FY28, driven by higher LME prices, even as it revised Novelis earnings downwards. This brokerage maintained 'Buy' on the Hindalco stock.
"Full-year Ebitda impact is estimated at $150-200 million, primarily from lost contribution and unabsorbed fixed costs. Insurance coverage is expected to recover 70-80 per cent of total fire-related losses, significantly mitigating long-term economic impact," MOFSL said.
To recall, Novelis faced two separate fire incidents at the Oswego facility in September 2025 and November 2025. The September fire incident largely affected the roof, while the November incident affected floor-level machinery and cabling. This is materially extending the restoration costs and restart timeline.
Nuvama said even as it has raised its target of Hindalco Industries to Rs 923 from Rs 838 earlier, it awaits lower prices to re-enter the stock. The stock settled at Rs 966.60 apiece on Wednesday.
"The adverse impact of fire at Oswego plant is likely to continue until Q2FY27. Management estimates total impact of $1.3–1.6 billion on cashflows (70–80 per cent is recoverable, which can be questionable). With adverse impact of fire to be over by Q2FY27, core Ebitda per tonne of $495 provides earnings visibility H2FY27 onwards," it said.
MOFSL said it sees the fire incident impact spilling into H1CY26 as a negative development, nut expects the impact on the Hindalco stock price to be limited, with the market broadly seeing it as a one-off.