Hindalco Sees $650 Million Cash Flow Hit From US Plant Fire

07 Nov 2025 CW Team

Hindalco Industries Ltd, part of the Aditya Birla Group, has estimated a negative free cash flow impact of between USD 550 million and USD 650 million following the fire at its Novelis plant in Oswego, New York, on 16 September.

The company stated that the total loss includes an adjusted EBITDA impact of approximately USD 100–150 million. Additionally, Novelis is expected to incur USD 21 million in restoration and related expenses, over and above the revenue loss caused by the production disruption.

According to Hindalco, insurance companies are expected to cover 70–80 per cent of the total losses and damage from the incident.

The fire, which broke out in the hot mill area of the plant, caused significant production downtime, though no casualties were reported. In a statement, Steve Fisher, President and CEO of Novelis Inc, said the company expects to restart the hot mill operations in December 2025, adding, “Despite this unexpected challenge, we remain confident in the strength of our business, the resilience of our team, and our ability to adapt and recover.”

In its exchange filing, Hindalco reported that Novelis’ Q2 FY26 net sales rose 10 per cent year-on-year to USD 4.7 billion, while adjusted EBITDA fell 9 per cent to USD 422 million.

The decline in EBITDA, the company explained, was primarily driven by net negative tariff impacts and higher aluminium scrap prices, which were partially offset by higher product pricing and cost-efficiency measures.

The financial impact of the fire is expected to weigh on Hindalco’s near-term cash flow and profitability, though the company emphasised that insurance recoveries and operational recovery plans are in place to mitigate long-term effects.

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