Hindalco Updates: Oswego Hot Mill Fire Impact and Restart Timeline; FY2026 Cash Flow Hit Estimated at $550-650 Million

Updated: November 05, 2025 11:42

Image Source : The Financial Express

Hindalco Industries reported its hot mill facility at Novelis’ Oswego plant, New York, is expected to restart by end-December 2025 following a September fire incident. The company forecasts a $550-650 million negative cash flow impact for FY2026 but continues restoration efforts to resume full operations within 4-6 weeks post restart.

Hindalco Industries, in an official update, informed stakeholders about the ongoing recovery from a fire incident at its Novelis subsidiary’s Oswego plant, which occurred on September 16, 2025. The fire has disrupted production at this critical aluminum recycling and manufacturing facility but caused no injuries.

The company is undertaking extensive restoration at the site to return to operational normalcy. The hot mill, responsible for about 10% of Novelis’ output and significant for supplying high-margin automotive aluminum, is slated to restart by the end of December 2025. A progressive 4 to 6-week production ramp-up is planned to restore full capacity.

Despite the disruption, the Oswego plant’s downtime negatively impacts Hindalco’s financials, with the firm estimating a hit of $550-650 million to free cash flow for fiscal 2026. Adjusted EBITDA is expected to suffer a reduction of approximately $100-150 million due to the incident.

The company also faces challenges from U.S. tariffs on imported aluminum, which dampened earnings in recent quarters. Nonetheless, Hindalco’s broader operations, including India-based manufacturing and expansion projects, continue to perform robustly with positive market outlook.

Market reactions have been mixed, with concerns about short-term operational setbacks tempered by optimism over long-term strategic positioning in high-growth sectors like automotive and renewables. Experts highlight Hindalco’s resilience, progressive restoration plans, and expected return to full productivity as key positives.

Key Highlights:

Fire incident at Novelis Oswego plant on Sept 16, 2025; no injuries reported.
Hot mill expected to restart by Dec 2025, followed by 4-6 weeks production ramp-up.
Oswego facility contributes ~10% of Novelis production, key for automotive aluminum supply.
Hindalco estimates FY2026 cash flow impact of $550-650 million, with $100-150 million EBITDA hit.
Ongoing restoration and recovery efforts underway aiming to minimize long-term disruption.
U.S. tubing and aluminum tariffs continue to affect earnings but strategic growth remains intact.
Market response cautiously optimistic amid operational challenges and strong sector demand.

Hindalco's expansion in India and sustainable initiatives support positive future prospects.

Sources: NSE India official filings, TradingView, ICICI Direct, MoneyControl, Economic Times, Novelis Corporate Communications

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