Hindalco Industries shares at Rs 600? Stock price targets post in-line Q2

Higher finance cost and depreciation partially offset higher other income, as Hindalco Industries Ltd reported an in-line flattish profit for September quarter. A few analysts said revenue degrowth at 4 per cent on year-on-year basis was in fact better than estimates on stronger. Novelis and copper business performances. Ebitda for the Aditya Birla Group company, was in line with Street estimates.

Despite global macro uncertainties, said Motilal Oswal Securities, a rebound in demand is anticipated across all the segments. This resurgence, the brokerage said, is expected to be driven by increased demand from EV, consumer durables, industrial machinery, infrastructure, and the construction sector.

"Volume growth across geographies is expected to remain stable going ahead and all the capex across all the geographies are on track. We believe that Hindalco is well placed to capitalise on the strong growth opportunity. We have raised our FY25E Ebitda/ APAT by 5 per cent/3 per cent due to improved outlook," it said while suggesting a target of Rs 580 on the stock. 

Following the development, the stock rose 1.72 per cent to hit a high of Rs 490.65 on BSE.

Hindalco Industries reported a profit of Rs 2,196 crore for the quarter compared with Rs 2,205 crore in the same quarter last year.

Prabhudas Lilladher said Hindalco is best placed amongst the metals space as Novelis is expected to witness gradual improvement in per tonne Ebitda over next few quarters. It said opening up of captive coal mines will benefit India business post FY26 while a rising focus on high margin value added products such as FRP expansion would drive volume growth from FY26

"Despite business headwinds, Novelis continue to perform well and invest significantly in growth. We have raised our FY24/25/26E Ebitda by 6 per cent/1 per cent/4 per cent, respectively on robust Novelis performance. At the prevailing market price, the stock is trading at attractive valuations of 5.2 times/4.4 times EV of FY25E/FY26E Ebitda. Retain ‘Buy’ rating with revised target of Rs 583 (earlier Rs 557) valuing Novlies at 6.5 times EV of Sept 2025E Ebitda, as we roll forward," it said.

JM Financial said the long term outlook for Hindalco continues to remain buoyant given Novelis remains confident of achieving its medium term Ebitda per tonne  guidance of $525 and resilient performance by India aluminium operations. It also cited enhanced coal security post acquisition of Meenakshi, Meenakshi west and Chakla coal mines and growth capex as reasons for being positive on the stock.

"Hindalco, given 70 per cent-plus steady/strong Ebitda being non-LME linked, remains our preferred play in the metal space. Maintain BUY," it said while suggesting a target of Rs 600.

Meanwhile, Nuvama Institutional Equitie has a 'Hold' rating on the stock. It said India’s aluminium business profitability hinges on aluminium prices, which are range-bound. Cost of production is likely to remain flat sequentially, it said adding Novelis earnings shall stay firm at $525 per tonne from Q4FY24 post a seasonally weak Q3. This brokrage has a target of Rs 552, valuing India business at 5 times and Novelis at 6.5 times FY25E/26E average EV/Ebitda.

 

 

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