Hindalco Shares Hit 52-Week High As Morgan Stanley Initiates Bullish 'Overweight' Stance: Buy, Sell, Or Hold?

Shares of Hindalco Industries gained 5% to hit a 52-week high mark on Wednesday, May 27, after global brokerage Morgan Stanley initiated coverage on the metal manufacturer with a bullish 'overweight' stance. The positive momentum was also on the back of a sharp surge in aluminium prices as it hit a four-year high buoyed by Iran war tensions and possible production cuts by China, the world's largest manufacturer. Apart from Morgan Stanley, several brokerages hiked the target price on the stock after the Aditya Birla-Group subsidiary reported strong January-March quarter earnings earlier this month with a dividend payout.

Shares of Hindalco Industries Ltd opened at Rs 1,118.30 against a previous close of Rs 1,103.80 and gained nearly 4% to hit a 52-week high mark of Rs 1,154 apiece on the NSE. Shares last traded 3.51% higher at Rs 1,142.50 apiece on the NSE. The stock has given robust returns as it has risen 5.27% in one week, 7.62% in one month, 27.68% on a year-to-date basis and 73.28% in the last one year. The copper and aluminium major commands a market cap of Rs 2,56,565.85 crore, according to stock exchange data.

Hindalco Share Price Intraday

Hindalco Share Price: What's Fueling The Stock?

1. Alumnium Prices

Aluminium prices surged over 4% which supported the metal stock's uptrend in afternoon trade today. According to a report by Bloomberg, traders are increasingly concerned that Chinese aluminium smelters could be asked to curb production as the country intensifies its review of energy consumption and emissions across major industries. Chinese smelters have been running at full capacity amid a global supply shortage triggered by the Middle East conflict, said the report.

Aluminium prices on the London Metal Exchange (LME) have risen since the war began in late February, as supplies from the region were disrupted due to the effective blockade of the Strait of Hormuz. The report added that Chinese authorities are now looking to rein in excess production as inventories continue to build up. China's Ministry of Industry and Information Technology said in a statement on May 13 that sectors including steel and oil refining would also come under scrutiny.

2. Morgan Stanely Initiates Coverage

Morgan Stanley initiated coverage with an 'Overweight' rating on Hindalco. With a target price of Rs 1,325, the Wall Street major implies an upside potential of more than 20% from the previous closing price. According to the brokerage, Hindalco is well positioned for value unlocking, supported by strong free cash flow (FCF) generation potential over the medium term.

Morgan Stanley forecasts a robust 13% EBITDA CAGR over the F27-F29 period, alongside an estimated 15% Return on Equity (ROE) by F29. The stock is currently trading at approximately 7.7x one-year forward EV/EBITDA. Morgan Stanley deems this premium (roughly 10% above its long-term historical mean) justified given the strong earnings visibility.

The brokerage firm's bullish stance highlights several key drivers for the metals major. Favorable supply-demand dynamics will support Hindalco as Morgan Stanley points to constrained supply growth-due to China's smelter caps and slow capacity expansion elsewhere-meeting sustainability-driven demand. The company is viewed as being structurally well-positioned for near-term value unlocking, backed by strong medium-term free cash flow generation potential. The positive underlying conditions for Hindalco's subsidiary, Novelis, and its subsequent reovery, are also supporting the positive thesis.

Though Novelis faces near-term pressure from scrap costs, tariff headwinds, and elevated capex making F27 a transitional year, the commissioning and ramp-up of the Bay Minette facility will act as the key mid-term driver. This will push Novelis back toward its long-term EBITDA target of US$600+/tonne. Rapid FCF generation and aggressive corporate deleveraging are expected to begin in earnest from F28, driving major value for equity shareholders, said the brokerage. 

Near-term tailwinds include escalating energy costs, Chinese supply discipline, and supply chain disruptions in the Middle East that have driven London Metal Exchange (LME) aluminium prices and regional premiums to multi-year highs. Ex-US and LME global inventories remain near historical lows, leaving a very small buffer for market shocks. This limits the downside risk for aluminum prices and increases the probability of sharp price spikes.

The expanding pomestic portfolio is also a key driver as India's aggressive macroeconomic growth cycle is structurally elevating domestic demand for both aluminium and copper, where Hindalco holds a highly competitive, integrated cost position. Among the key risks to watch, Morgan Stanley noted that any severe deterioration in global economic growth or a significant execution delay in the commissioning of the Bay Minette project represent the primary downside risks to their target price.

3. Hindalco Q4 Results

Hindalco net profit rose 26.7% at Rs 2,597 crore in the fourth quarter of the previous fiscal. This is in comparison to profit of Rs 2,049 crore in the third quarter of fiscal 2026. Consolidate revenue of the aluminum and copper manufacturing advanced by 17.5% quarter-on-quarter for the three months ended March, reaching Rs 78,133 crore in comparison to Rs 66,521 crore. Operating income, or earnings before interest and taxes rose 25.3% to Rs 10,018 crore from Rs 7,994 crore.

Margins expanded to 12.8% from 12% in the same previous quarter. The India operations delivered record Ebitda in both the aluminium and copper segments during the quarter. Hindalco said higher aluminium prices significantly boosted profitability in its India aluminium business. In the copper segment, favourable realizations along with stronger by-product prices supported earnings growth during the quarter.

Hindalco added that Novelis reported an improvement in margins despite disruptions at its Oswego facility, which impacted shipments and earnings during the period.

Lower scrap costs helped improve Novelis' Ebitda per tonne, partially offsetting the operational disruption. Hindalco announced final dividend of Rs 5 per equity share for the fiscal 2026 as profit surges. The company announced distribution of nearly Rs 1,123 crore to shareholders. The record date for ascertaining entitlement of final dividend for fiscal 2026 has been set as July 10. According to the exchange filing the final dividend is subject to approval of the Members of the company at the ensuing annual general meeting.

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