Citi has maintained a Buy rating on Hindalco Industries, setting a target price of ₹725, indicating potential upside from the current market price of ₹651.25. The brokerage said its positive stance is driven by the long-term earnings outlook of Novelis, despite near-term caution.
Novelis, the U.S.-based subsidiary of Hindalco, reported Q4FY25 adjusted EBITDA of US$473 million, which was in line with expectations, but down 8% year-on-year due to elevated scrap prices and operating costs. This was partly offset by improved pricing across key product segments.
Volumes during the quarter rose by around 1% YoY to 957 kilotonnes, driven by higher shipments in beverage cans, aerospace, and specialty products, which helped offset a decline in automotive segment volumes.
EBITDA per tonne improved to US$494, up from US$406 in Q3, but remained lower than the US$540 achieved in the same quarter last year.
Management has refrained from providing near-term margin guidance, citing continued weakness in auto demand and the possible impact of new tariffs, estimated at US$40 million per quarter, unless mitigated by trade negotiations. However, scrap prices are showing signs of stability, and the company reiterated confidence in achieving its long-term EBITDA guidance of US$600 per tonne.
Citi believes Hindalco’s positioning in high-growth downstream segments and Novelis’ consistent cost controls make it an attractive long-term play, despite some short-term macro headwinds.
Disclaimer: This article is based on publicly available brokerage commentary and data. It does not constitute investment advice. Business Upturn and the author do not recommend buying or selling any stock mentioned.
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