Hindalco’s US subsidiary Novelis is likely to face challenges on account of the 25% US tariffs on steel and aluminium imports, which may in turn put pressure on margins, a senior executive said.
“Novelis has a plant in Canada which exports 80 KT (kilo-tonne) of auto and specialty aluminium to the US. So, there will be some impact of the tariffs on Novelis,” Satish Pai, managing director, Hindalco Industries said.
As of March 12, Canadian steel and aluminium imports attract a 25% tariff in the US. While president Donald Trump had introduced the steel and aluminium tariffs in first term in March 2018, Canadian and Mexican imports were exempt from the 25% tariff on steel and 10% tariff on aluminium under Section 232 tariffs.
Pai reiterated that the copper and aluminium manufacturer’s India business will not have an impact 65% of the aluminium and 90% of the copper it produces is used for domestic consumption.
He also said that FY26 will be the year of peak capex for Novelis at $2.4 billion (FY25: $1.7 billion) as the firm inches towards it September 2026 target for commercialisation of the Bay Minette plant in Alabama, USA.
Getting the Bay Minette plant up and running, and improving profitability of Novelis would be the focus for the firm over the next two years, putting the firm’s plans for an IPO on the Indian exchanges further on the backburner.
The India capex under Hindalco will also increase to Rs 7,500 – Rs 8,000 crore from Rs 6,451 crore in FY25 as the company invests in expansion within the country, Pai added.
In FY26, Hindalco will continue expanding its portfolio of downstream products, with new launches in the auto and industrial application expected in FY26.
The firm, which announced its Q4FY25 results on Tuesday said that while downstream shipments were flat year on year, revenues in the segment were driven by a better product mix which now includes foil stock, packaging, and EV battery frames.
In April this year, Hindalco announced that it has delivered 10, 000 aluminium battery enclosures to Mahindra and Mahindra at its Chakan plant, as it expands its downstream product portfolio.
