Group EBITDA rose 73%. We locked the subsidiary.

We lock a binary: Novelis' reported adjusted EBITDA for Q2 FY2027 is US$400m or higher. Confidence 90%.

Q1 FY2027 Novelis adjusted EBITDA was US$516m. Our threshold sits about 22.5% below that. The interesting question is not the buffer — it is why this lock is on a subsidiary at all when the parent just posted a record.

Hindalco's Q1 FY2027 was extraordinary on every line. Consolidated EBITDA of INR 14,989 crore, up 73%. Net profit of INR 7,013 crore against INR 4,004 crore. Revenue up 32% to INR 84,825 crore. Aluminium upstream EBITDA up 81% to a record INR 7,390 crore. All four segments at their highest-ever quarterly EBITDA.

Locking any of those would be locking the price of aluminium. Upstream smelting economics are a spread between a largely fixed cost base and an LME-set metal price, so when the metal moves, the EBITDA moves with enormous operating leverage — which is exactly what an 81% increase in one year describes. A forecaster anchoring there is forecasting the London Metal Exchange and calling it company analysis.

This series does not do that. Doctrine §18.1 and the P-151 rule bar directional price calls, and this tranche applies that to commodities for the second time in two locks and the fourth time in three tranches — after Vale at P-322, where we locked tonnes and explicitly disclaimed any view on margins, and Saudi Aramco at P-330, where we locked a board-set base dividend rather than oil-driven earnings.

Novelis is the way through. It is a CONVERTER: it buys aluminium, rolls and finishes it, and sells the product at a conversion premium. Its economics are a spread over metal cost rather than a bet on metal price, and it passes through most metal movement to customers. Its EBITDA moves on shipment volumes, product mix and plant efficiency — quantities management actually controls.

Coverage reported Novelis' EBITDA improvement as 24% and as 37% in the same set of results. The absolute figure — adjusted EBITDA of US$516m on revenue of US$5.8bn, against US$4.7bn a year earlier — was consistent. Under the standing conflicting-source rule the lock takes the absolute number and ignores the disputed growth rate, which is also why the criterion is written in dollars rather than as a percentage.

Two operational facts sit behind the quarter, and they pull in opposite directions for a forward lock. The Oswego hot mill restart is a genuine capacity return that should persist, and the cost optimisation programme is delivering accelerated benefits. Both support the floor. But US$516m is Novelis' highest-ever quarterly EBITDA, and a threshold anchored on a record needs a wider buffer than one anchored on an ordinary quarter — the lesson banked from Samsung at P-314.

Hence 22.5%, which is wide for a business with contracted conversion economics and deliberately so. It allows for the record not repeating, for a rolled-products destocking cycle, and for the automotive and beverage-can end markets softening together.

The residual 10% is a demand contraction in can sheet or automotive aluminium, or an unplanned outage at a major mill of the kind Oswego itself has just recovered from.