Trump tariff is not 'negative' for Hindalco's India business: Satish Pai

Chinese aluminium imports no longer cheaper and country can't afford to dump metal in India, says company's MD

Hindalco Industries plans to spend Rs 6,000 crore as capex in India in Financial Year 2024-25 (FY25) and Rs 8,000 crore the next year. SATISH PAI, the company’s managing director, told Amritha Pillay in a video interview he expects Novelis, a subsidiary, to bounce back in the fourth quarter (Q4). Pai said America’s announcement of trade tariffs will not have a “negative” impact on Hindalco and Chinese aluminium imports to India are no longer cheaper. Edited excerpts:

 

In your Q3 performance, India operations helped offset the weakness seen for Novelis. Do you expect this trend to prevail

 

In Q4, Novelis will bounce back. Both India and Novelis should do well and it should be a good quarter. Q3 for Novelis is a seasonally low quarter because of maintenance during the holiday season. This was compounded by the scrap spreads tightening. But the volumes will come back in Q4. With LME (London Metal Exchange) still holding, India operations should be good in Q4 as well.

 

With the US imposing tariffs on aluminium, what is the outlook for the two markets you have a presence in: India and US?

 

(US President Donald) Trump tariff: There is no negative for our India business because we do not export anything to the US. We are not impacted. Well, it is neutral to positive for what is happening in the US (for Novelis) as the scrap benefit will go up when the Midwest (premiums) goes up.

 

There are concerns that the US tariffs could mean exports meant for that country will be diverted. What will be the likely impact for your other export markets?

 

The primary aluminium that the US uses – 90 per cent – comes from one country: Canada. It is not that there is a lot of aluminium from many different parts of the world going there. I do not expect worldwide aluminium prices to get impacted. Regional premiums may get impacted, but there is not going to be a huge directional flow because every country has got 25 per cent.

 

You had flagged concerns about Chinese aluminium imports. Do you still see those concerns?

 

No. What China has done, which is more important than this Trump tariff, is that they have taken away that 13 per cent VAT rebate. For China to import into India, the prices have gone up. China, probably to protect itself under US tariffs, has been removing its subsidies. With this 13 per cent rebate going away, it makes it more expensive for China to export aluminium now. They should not be able to dump in India at very low prices.

 

Any update on plans for Novelis to have an initial public offering (IPO)?

 

For us now, we have to get Novelis' profitability back to $500 per tonne. We have to finish the Bay Minette project that is to be commissioned in September of 2026. Until those two happen, the IPO is not a priority right now. At least for another year, we are not going to think about it.

 

There is a considerable rise in your debt numbers from a year ago. Do we expect any changes there?

 

Novelis needs to get more debt to fund the payment. Novelis did a $750 million bond offering in January and probably in the latter half of FY26 they'll do another $750 million. On the India side, we are net cash positive.

 

For your India copper operations, two big conglomerates, Adani and JSW, are now competitors. What is Hindalco’s strategy?

 

Competition is coming in and that is okay. The way we look at it is that we are going more and more into copper downstream. Just like we did in aluminium. We will keep our differentiation on having an upstream and a downstream. If the upstream comes under pressure, the downstream will help. The integrated business model is the way we will differentiate ourselves.