CLSA has maintained an Outperform rating on Hindalco Industries with a target price of ₹815, suggesting notable upside from the current market price of ₹651.25. The brokerage noted that Q4FY25 performance of its U.S.-based subsidiary Novelis was largely in line with expectations.
Novelis posted an adjusted EBITDA of US$473 million in Q4, with higher profitability partially offset by lower shipment volumes. EBITDA per tonne improved 22% quarter-on-quarter to US$494, though still down 9% year-on-year, mainly due to a stronger performance in beverage can pricing.
While Novelis did not issue specific short-term margin guidance, it highlighted strong demand and pricing for beverage packaging across regions, coupled with stable scrap costs, which are expected to support margins going forward.
CLSA also cited Novelis’ cost-saving initiatives, which could generate US$75 million in FY26 and up to US$300 million annually starting FY28, as a key potential tailwind for Hindalco’s consolidated earnings trajectory.
On the balance sheet front, the company reiterated that peak net leverage will remain below 3.5x, with the current level at 2.9x, even as its large-scale Bay Minette project nears commissioning.
CLSA sees Hindalco as well-positioned in the global aluminium value chain, with margin resilience in Novelis and cost efficiencies driving long-term performance.
Disclaimer: This article is based entirely on brokerage research and public disclosures. It does not constitute investment advice. Business Upturn and the author do not recommend buying or selling any stock mentioned.
