CLSA has reiterated its outperform rating on Hindalco Industries and raised its target price to ₹965 per share after a series of investor meetings indicated improving confidence around both aluminium pricing and the company’s medium-term earnings trajectory. The brokerage highlighted that even at an LME aluminium price of US$2,600 per tonne—well below the current spot of around US$2,850—Hindalco’s ongoing capacity additions and margin expansion initiatives could potentially allow the company to double its EBITDA over the next five years, with free cash flow surging in the latter part of the cycle.
While near-term sentiment around Novelis has been clouded by capex escalation and a recent plant fire, CLSA believes these issues are largely offset by a constructive view on aluminium pricing globally. It noted that China is approaching its 45 million tonne aluminium capacity ceiling, while Indonesia’s announced expansions face power availability constraints. At the same time, capacity addition across the rest of the world remains challenged by tight energy markets and rising power demand from data centres and AI-related infrastructure.
CLSA said demand remains resilient across key end-markets and highlighted that Hindalco has hedged 49% of its 4QFY26 aluminium exposure at US$2,760 per tonne and 10% of FY27 exposure at US$2,800 per tonne, offering earnings visibility in an improving cycle. The brokerage reiterated that Hindalco remains well-positioned to benefit from both cyclical tailwinds and structural supply constraints, supporting its positive stance.
Disclaimer: The views and recommendations above are those of CLSA. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
