Hindalco Industries' stellar first-quarter performance has triggered a wave of optimism among global brokerages, driven by a sharp operational recovery at its US subsidiary Novelis, strong domestic traction, and a steady roadmap for capacity expansion. Leading financial institutions including HSBC, UBS, and JP Morgan have maintained their bullish stances on the stock with raised target prices, while Jefferies opted for a more cautious outlook on near-term profitability moderation.
Here is a detailed look at how top global brokerages analyzed Hindalco's Q1 print:
HSBC & UBS: The Strongest Bulls on the Street
HSBC maintained its 'Buy' rating on Hindalco with a Street-high target price of ₹1,430. The brokerage underscored a massive Q1 beat, with consolidated EBITDA soaring 37% quarter-on-quarter to ₹139.7 billion. According to the firm, Novelis earnings are poised for further recovery as operations at the Oswego plant restart. Furthermore, HSBC highlighted that potential insurance receipts and working-capital release will accelerate the company's deleveraging process. The brokerage also noted that multiple growth catalysts-including the Bay Minette commissioning and domestic aluminium and alumina capacity expansions-leave ample room for a stock re-rating. HSBC pointed out that at current market prices, Novelis' implied valuation is a mere ~2x FY28E EV/EBITDA, leaving significant scope for upside as operational hurdles fade.
UBS shared a similar level of optimism, retaining its 'Buy' call with a target of ₹1,325. The brokerage noted that the Q1 EBITDA of ₹140 billion outpaced its own estimates by a whopping 29%, powered by outperformance across its copper, Novelis, and upstream aluminium divisions. A major highlight was Novelis' adjusted EBITDA per ton, which stood at a robust US$563, handily beating expectations. Meanwhile, India's aluminium upstream EBITDA surged 81% year-on-year. UBS views Novelis' deleveraging as a critical catalyst for the stock, predicting a US$300-400 million working-capital release and a target leverage ratio falling below 4x by the end of FY27.
JP Morgan: Growth "Within Sniffing Distance"
JP Morgan retained its 'Overweight' stance on Hindalco, hiking its target price to ₹1,205 from ₹1,190. The brokerage emphasized that the company's next major phase of growth is "within sniffing distance." According to the firm, Hindalco's expansion projects remain firmly on track, with the Phase 1 aluminium smelter expected to be commissioned by December 2027, which will generate meaningful volumes by FY29. Additionally, captive coal mines are set to yield ~1.5 million tonnes (MT) in FY28, providing significant cost savings.
Addressing leverage, JP Morgan observed that consolidated net debt-to-EBITDA ticked up slightly quarter-on-quarter to 1.95x from 1.83x, largely driven by Novelis. Management has reiterated that FY27 will be a capex-heavy year, even for the India business. However, JP Morgan expects the consolidated Net Debt/EBITDA ratio to remain stable in the coming quarters and likely begin declining by the fourth quarter of FY27.
Jefferies: Cautious on Peak Margins, but Sees Value
Striking a more conservative tone, Jefferies maintained its 'Hold' rating while slightly tweaking its target price higher to ₹1,100 from ₹1,075. The brokerage acknowledged a strong Q1, noting that consolidated EBITDA surpassed estimates by 20% on the back of the sharp Novelis recovery and solid India earnings.
In the domestic market, India EBITDA climbed 26% QoQ owing to stronger realizations for aluminium and sulphuric acid. However, Jefferies anticipates this profitability to moderate from its Q1 peak in the coming quarters. Despite the cautious near-term margin outlook, the brokerage conceded that Hindalco's valuations remain highly reasonable, with the stock trading at 1.4x FY27E price-to-book (P/B) and 6.3x enterprise value-to-EBITDA.
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