Hindalco Says Up to 80% of Loss Claims Insured After Novelis Fire, $550–650 m Cash Flow Hit Forecast for FY26

Aditya Birla Group's Hindalco Industries Limited's (Hindalco) latest disclosure outlined the financial implications of the fire at its wholly-owned subsidiary, Novelis Inc.’s plant in Oswego, New York. 

In a filing to the National Stock Exchange of India (NSE) and the BSE Limited today, Hindalco reported that it expects approximately 70–80 % of the loss from the fire to be recoverable through insurance. 

The company has already recognized US $21 million in charges in Q2 FY26. It has also revised its guidance to anticipate a negative free-cash-flow impact of US $550–650 million for the 2026 fiscal year, and an adjusted EBITDA shortfall of US $100–150 million as a result of the production disruption. 

According to the filing, the fire occurred on 16 September 2025 at the Oswego hot-mill of Novelis. Motion to restore full operations is underway; the hot mill is expected to restart by end-December 2025, followed by a 4–6 week production ramp-up to reach normal levels. 

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Hindalco added that it has already commenced “extensive restoration efforts” and noted that further details can be found in the earlier 4 November filing. 

The incident comes at a critical moment for Hindalco, which has been navigating volatile commodity prices, global aluminium supply-chain shifts and rising energy costs. The impact at Novelis adds both operational and financial risk, though the insured portion provides a cushion.

What to watch

The actual insurance recovery, and timing of the claim, given that the estimate (70–80 %) is still preliminary. The production ramp-up timeline: whether the hot mill meets the end-December restart target and how quickly output normalizes.

How the disruption influences Novelis’ contracts and pricing, and whether downstream aluminium demand or premium market dynamics shift, as per industry analysts

The winter season and energy costs, which could impact Novelis’ restart plans and cash-flow generation.

Hindalco noted that the filing is available on its website at www.hindalco.com. The company will likely address further details in its Q2 FY26 earnings update and perhaps at its subsequent investor call.

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