'Buy' Hindalco Shares Maintains Motilal Oswal As Novelis, India Business Growth Outlook Remains Robust

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Motilal Oswal Report

Hindalco Industries Ltd.’s Indian operation is net debt free and the company’s consolidated net debt-to-Ebitda ratio stood at 1.06x as of Mar’25 vs 1.21x in Mar’24.

The announced/ongoing expansion is set to position Hindalco as the global leader, though any delay in the stated timeline and cost escalation might put pressure on the cash flow.

Volume growth across geographies will remain stable for Hindalco, and favorable pricing will limit cost pressure and maintain the margins in the medium term.

The stock is trading at 5.5x FY27E EV/Ebitda and 1.2x FY27E P/B. We reiterate our Buy rating on Hindalco with our SOTP-based target price of Rs 800.

Key Risk:

1. delay in capex timeline and cost escalation,

2. rise in aluminum scarp price,

3. US tariff escalation.

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