Share-Based Compensation

12 Months Ended

Mar. 31, 2026

Share-Based Payment Arrangement [Abstract]

The Company's Board of Directors has authorized long-term incentive plans, under which Hindalco SARs, phantom RSUs, and Novelis PUs are granted to certain executive officers and key employees.

The Hindalco SARs vest at the rate of 33% per year, subject to the achievement of an annual performance target. Fiscal years ended March 31, 2016 SARs expire in May of the seventh year from the original grant date, while the fiscal year ended March 31, 2017 and onwards SARs expire seven years from their original grant date. The performance criterion for vesting of the Hindalco SARs is based on the actual overall Novelis operating EBITDA compared to the target established and approved each fiscal year. The minimum threshold for vesting each year is 75% of each annual target operating EBITDA. Given that the performance criterion is based on an earnings target in a future period for each fiscal year, the grant date of the awards for accounting purposes is generally not established until the performance criterion has been defined.

Each Hindalco SAR is to be settled in cash based on the difference between the market value of one Hindalco share on the date of grant and the market value on the date of exercise. The amount of cash paid to settle Hindalco SARs is limited to three times the target payout, depending on the plan year. The Hindalco SARs do not transfer any shareholder rights in Hindalco or Novelis to a participant. The Hindalco SARs are classified as liability awards and are remeasured at fair value each reporting period until the SARs are settled.

The RSUs are based on Hindalco's stock price. The RSUs vest either in full three years from the grant date or 33% per year over three years, subject to continued employment with the Company, but are not subject to performance criteria. Each RSU is to be settled in cash equal to the market value of one Hindalco share. The payout on the RSUs is limited to three times the market value of one Hindalco share measured on the original date of grant. The RSUs are classified as liability awards and expensed over the requisite service period (three years) based on the Hindalco stock price as of each balance sheet date.

Total compensation expense related to Hindalco SARs and RSUs under the plans for the respective periods is presented in the table below. These amounts are included in selling, general and administrative expenses in our consolidated statements of operations. As the performance criteria for the fiscal years ending March 31, 2027, 2028, and 2029 have not yet been established, measurement periods for Hindalco SARs relating to those periods have not yet commenced. As a result, only compensation expense for vested and current year Hindalco SARs has been recorded.


in millions	Fiscal 2026		Fiscal 2025		Fiscal 2024
Total compensation expense	$	26	$	39	$	29

The table below shows the RSUs activity for fiscal 2026.


	Number of RSUs	Grant Date Fair Value (in INR)	Aggregate Intrinsic Value (USD in millions)
RSUs outstanding as of March 31, 2025	5,829,708	490.15	$	50
Granted	1,788,716	635.78	17
Exercised	(3,979,864)	442.56	32
Forfeited/Cancelled	(321,174)	600.30	—
RSUs outstanding as of March 31, 2026	3,317,386	615.40	34

During fiscal 2025, we granted 1,714,753 RSUs with a grant date fair value of INR 681.40, and the aggregate intrinsic value of RSUs exercised was $15 million.

During fiscal 2024, we granted 1,975,035 RSUs with a grant date fair value of INR 417.90, and the aggregate intrinsic value of RSUs exercised was $13 million.

Total cash payments made to settle RSUs were $32 million, $15 million, and $13 million in fiscal 2026, fiscal 2025, and fiscal 2024, respectively.

As of March 31, 2026, unrecognized compensation expense related to the RSUs was $12 million, which will be recognized over the remaining weighted average vesting period of 1.4 years.

The table below shows Hindalco SARs activity for fiscal 2026.


	Number of Hindalco SARs	Weighted Average Exercise Price (in INR)	Weighted Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (USD in millions)
Hindalco SARs outstanding as of March 31, 2025	4,914,602	490.07	5.2	$	12
Granted	1,685,232	635.78	6.3	4
Exercised	(2,611,517)	427.18	—	12
Forfeited/Cancelled	(308,039)	608.57	—	—
Hindalco SARs outstanding as of March 31, 2026	3,680,278	591.49	5.4	12
Hindalco SARs exercisable as of March 31, 2026	548,207	556.47	4.4	2

During fiscal 2025, we granted 1,451,753 Hindalco SARs with a grant date fair value of INR 684.10, and the aggregate intrinsic value of Hindalco SARs exercised was $12 million.

During fiscal 2024, we granted 2,620,019 Hindalco SARs with a grant date fair value of INR 417.90, and the aggregate intrinsic value of Hindalco SARs exercised was $5 million.

The cash payments made to settle Hindalco SAR liabilities were $12 million, $12 million, and $5 million in fiscal 2026, fiscal 2025, and fiscal 2024, respectively.

As of March 31, 2026, unrecognized compensation expense related to the non-vested Hindalco SARs (assuming all future performance criteria are met) was $7 million that are expected to be recognized over a weighted average period of 1.3 years.

The fair value of each unvested Hindalco SAR was estimated using the following assumptions.


	Fiscal 2026		Fiscal 2025		Fiscal 2024
Risk-free interest rate	6.23%-6.82%		6.61%-6.71%		6.95%-7.15%
Dividend yield	0.58	%	0.50	%	0.54	%
Volatility	28%-39%		29%-40%		26%-43%

The fair value of each unvested Hindalco SAR was based on the difference between the fair value of a long call and a short call option. The fair value of each of these call options was determined using the Monte Carlo Simulation model. We used historical stock price volatility data of Hindalco on the National Stock Exchange of India to determine expected volatility assumptions. The risk-free interest rate is based on Indian treasury yields interpolated for a time period corresponding to the remaining contractual life. The forfeiture rate is estimated based on actual historical forfeitures. The dividend yield is estimated to be the annual dividend of the Hindalco stock over the remaining contractual lives of the Hindalco SARs. The value of each vested Hindalco SAR is remeasured at fair value each reporting period based on the excess of the current stock price over the exercise price, not to exceed the maximum payout as defined by the plans. The fair value of the Hindalco SARs is being recognized over the requisite performance and service period of each tranche, subject to the achievement of any performance criteria.