CLSA has maintained its ‘Outperform’ rating on Hindalco and raised the target price to ₹850, after the company delivered a strong Q4 driven by India operations. The brokerage highlighted higher metal prices, improved downstream margins, and cost efficiencies as key positives.
Hindalco posted a 10.5% YoY rise in profit to ₹1,561 crore, with revenue climbing 13.4% to ₹25,116 crore and EBITDA growing 35.5% to ₹3,008 crore. The aluminium upstream business delivered an EBITDA surge of 78.6% YoY, while the downstream segment jumped 52% YoY.
CLSA expects profitability to moderate in the first half of FY26 due to softer aluminium and alumina prices and marginal cost inflation. However, the brokerage retains a robust medium-term outlook, citing high captive coal sourcing, resilient alumina exports, and strong downstream expansion.
At Novelis, benefits from ongoing capacity expansion are expected to materialize in FY28. CLSA also noted that consolidated debt could peak in FY27, allowing room for stronger free cash flow in the years ahead.
Disclaimer: This article is based on the brokerage report by CLSA. It does not constitute investment advice.
