Hindalco’s Q3 profit drop was attributed mainly to a one-time provision related to the fire accident at its US-based subsidiary Novelis.
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DENIS BALIBOUSE
Shares of Hindalco Industries came under pressure on Friday, falling 6.5 per cent, leading the losers of Nifty 50, after the company reported a sharp decline in net profit for the December quarter, largely due to an exceptional loss linked to a fire incident at its overseas subsidiary.
The stock closed at 6 per cent lower at 909 on the NSE, hitting a low of ₹901 against the previous close of ₹964.40.
The Aditya Birla Group company posted a consolidated net profit of ₹2,049 crore for the quarter, down 45 per cent from ₹3,735 crore a year earlier. The fall was attributed mainly to a one-time provision related to the fire accident at its US-based subsidiary Novelis. Revenue from operations, however, rose 14 per cent year-on-year to ₹66,521 crore compared with ₹58,390 crore, while EBITDA increased 5 per cent to ₹8,543 crore from ₹8,108 crore. The company reported an exceptional loss of ₹2,610 crore during the quarter.
Brokerages offered mixed assessments of the results and outlook. Analysts at Citi downgraded the stock to neutral from buy, though they raised the target price to ₹1,000 from ₹920. They said the structural bullish thesis could be tempered by leverage concerns, noting uncertainty over insurance recovery related to the Oswego fire and warning that cash flow impact appears higher than earlier expected. They also projected Novelis’ net debt-to-EBITDA ratio could climb to about 4.5 times by FY27.
Jefferies maintained a hold rating and lifted its target price to ₹890 from ₹855, describing the quarter as weak and flagging concerns around Novelis. The brokerage noted softer-than-expected performance in the domestic aluminium business and said multiple fire incidents cloud operational visibility while rising debt levels remain a concern. It nevertheless raised FY27–28 earnings estimates by 6 per cent on the back of stronger aluminium prices.
In contrast, HSBC retained a buy call but trimmed its target price to ₹1,210 from ₹1,240, arguing that underlying earnings remained strong and the Oswego impact should be viewed as a one-off event. The brokerage said higher working capital drove the jump in net debt, which it expects to reverse, and added that tight global aluminium supply conditions could support profitability.
Domestic brokerage JM Financial stated consolidated adjusted EBITDA came in marginally below expectations, with weaker performance at Novelis weighing on earnings. The brokerage highlighted improved aluminium EBITDA in India on strong global prices but pointed to a sharp rise in net debt due to higher borrowings and working capital needs. It maintained a buy at target price of ₹1,120, citing supportive metal prices and resource security following recent mine acquisitions.
Motilal Oswal Financial Services said consolidated performance was largely in line with expectations and driven by favourable pricing, with domestic operations expected to stay resilient. However, it cautioned that the fire incident and cost escalation at the Bay Minette project weaken near-term visibility. The brokerage expects insurance recoveries to offset part of the impact over the next 18–24 months and reiterated a buy call at a target price of ₹1,110.
The divergent brokerage views reflect a split between concerns over leverage and overseas disruptions and confidence in the company’s core domestic business, leaving investors focused on how quickly operational and balance sheet clarity emerges in the coming quarters.
Published on February 13, 2026
