Hindalco Flags $550–650 Million FCF Hit from Novelis Plant Fire, Recovery Expected by December

Hindalco Industries has estimated a negative free cash flow (FCF) impact of $550–650 million due to the fire at Novelis’ Oswego, New York plant on September 16. The incident disrupted production, particularly in the hot mill area, with an adjusted EBITDA loss of $100–150 million and additional restoration costs of $21 million. Operations are expected to resume in December 2025, with the hot mill restart marking a key recovery milestone. While there were no casualties, the fire significantly impacted revenue and production capacity. Hindalco noted that 70–80% of losses will be covered by insurance, mitigating financial risk. Despite the setback, Novelis reported a 10% YoY rise in Q2 net sales to $4.7 billion, though adjusted EBITDA fell 9% to $422 million due to higher scrap costs and tariff headwinds. Impact on Hindalco Near-term pressure on consolidated cash flows and profitability. Insurance recovery will help offset major capital outlays, limiting long-term damage. The incident underscores operational risks in its global assets but also highlights resilience through strong demand and cost management. With Novelis contributing significantly to Hindalco’s earnings, prolonged disruptions could affect margins and investor sentiment. However, the planned December restart and insurance cover suggest a manageable impact, keeping long-term outlook intact.