Earnings & Results
Hindalco Expects Consolidated Debt to Peak at ₹80,000 Crore, Plans Novelis Leverage Cut to 2.5 Times by FY31
By News Desk ·
Key takeaways
- Hindalco expects consolidated debt to have peaked at about ₹80,000 crore and to start declining from the next quarter.
- Managing Director Satish Pai said the company has committed to a net debt-to-EBITDA ratio of four times in Q4.
- Hindalco targets Novelis net debt-to-EBITDA of around 2.5 times by FY31 as Bay Minette and Oswego projects near completion.
Hindalco Industries expects its consolidated debt to have peaked at about ₹80,000 crore and plans to bring Novelis' net debt-to-EBITDA ratio down to 2.5 times by FY31, the company said. The target was outlined in the company's November 6 BusinessLine report.
Hindalco's Debt Reduction Plan and Novelis Target
Hindalco Industries is the Aditya Birla Group's listed metals flagship, operating an integrated aluminium and copper value chain from 27 captive bauxite mines through downstream flat-rolled products, foils and specialty alumina, plus the Novelis rolling and recycling subsidiary. The company expects debt reduction to gather momentum from the next quarter as capital expenditure on major projects approaches completion, EBITDA improves and stronger free cash flows are deployed towards repayment of borrowings.
Satish Pai, Managing Director of Hindalco Industries, said the company has more or less reached the peak now. "Debt will start coming down from next quarter. We have made a firm commitment that in Q4 the net debt-to-EBITDA will be at four (times)," he said. Pai said completion of the Bay Minette project-related debt commitments, coupled with improving earnings and cash generation, would support the deleveraging exercise.
The debt reduction plan follows substantial investments by Novelis in capacity expansion and the restoration of its Oswego facility following the fire. Novelis will begin shipping from its US aluminium unit in the June quarter of the next fiscal year, after commissioning a 600,000-tonne plant, The Times of India reported. The company spent $4.4 billion of the $5 billion project by September, and its Q3 profit rose 29% to $210 million, according to the same report.
Hindalco's Downstream and Copper Earnings Outlook
According to akta.pro company records, Hindalco operates 1.3 million metric tonnes of combined annual aluminium smelter capacity and 27 bauxite mines across Jharkhand, Odisha, Chhattisgarh and Maharashtra, supported by four captive coal mines. The company expects its downstream aluminium business to have around 600,000 tonnes of capacity in extrusions and rolled products by FY28, generating EBITDA of $300-350 per tonne, or more than ₹2,000 crore annually. Together with copper and specialty alumina, Hindalco expects nearly ₹6,000 crore of EBITDA from businesses not directly linked to LME aluminium prices over the next two years.
Hindalco's Earlier Moves This Year
Hindalco terminated its proposed acquisition of US-based AluChem Companies in October 2026, citing delays beyond control, and said it would continue evaluating acquisition opportunities, including in the US, to expand its specialty alumina business, Shanghai Metals Market reported. In the same month, Vi Business and Hindalco partnered to deploy a dedicated private network at Hindalco's Baphlimali bauxite mine in Odisha, BusinessLine reported. Hindalco also plans its first digital tender for metallurgical-grade alumina on Metalshub before the end of 2026, aiming to generate structured market data, alcircle reported.
Hindalco's Next Steps on Debt and Capacity
Hindalco expects costs in India to ease in Q4 as coal availability improves. The company is continuing with its copper expansion plans despite weak treatment and refining charges, supported by long-term copper concentrate supply agreements, and its investments in copper recycling are aimed at strengthening raw material security.