HSBC has reiterated its positive view on the aluminium space, raising its LME price assumptions for CY26 and CY27 by 4%–8% to USD 2,750/t and USD 2,850/t, respectively. The brokerage said global aluminium supply tightness is becoming increasingly structural, driven by energy constraints, slow capacity additions and improving demand visibility across transport, packaging and renewables. These dynamics, HSBC believes, create a favourable backdrop for Indian producers with diversified product portfolios and cost-competitive assets.
The brokerage maintained its buy rating on Hindalco with a revised target price of ₹1,040, citing strong earnings leverage from Novelis once normalisation begins in FY27. It also reiterated a buy call on Nalco with a target price of ₹308, supported by its low-cost smelting profile and rising production. HSBC said the setbacks Novelis faced over the past year are likely to fade, paving the way for improved profitability and cash flow visibility.
With aluminium premiums firming up and the supply–demand gap widening, HSBC expects the sector to see continued pricing support. The brokerage added that Indian producers are likely to benefit from structurally higher LME realisations and stable domestic demand, making the aluminium pack one of its preferred commodity clusters for the next two years.
Disclaimer: The views and recommendations above are those of HSBC. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
