ICICI Securities's research report on Hindalco Industries
Novelis’ (Hindalco’s 100% subsidiary) Q1FY26 (adj.) EBITDA of USD 416mn (and ~USD 432/te) has missed consensus estimates (~USD 445–450/te), mainly on account of: 1) negative tariff impact of USD 28mn; and 2) change in product mix. Management`s new estimate pegs the scrap imports cost escalating – due to the 50% tariff – to USD 60mn vs. USD 40mn earlier at 25% duty. However, commentary indicated that the performance is nearing its bottom with Q2 likely to be similar to Q1. Net debt increased to USD 5.6bn (vs. USD 5.2bn in Q4FY25); management targets ~3.5x max net leverage through the cycle (except for one-offs). We re-initiate coverage on the stock with a HOLD rating and an SoTP-based target price of INR 720 (6.5x FY27E EV/EBITDA for Novelis and 6x for the domestic business).
Outlook
We re-initiate coverage on the stock with a HOLD rating and an SoTP-based target price of INR 720 based on 6.5x FY27E EV/EBITDA for Novelis and 6x for domestic business (near to long term mean multiple).
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
