Hold Hindalco Industries: target of Rs 720: ICICI Securities

ICICI Securities's research report on Hindalco Industries

Hindalco (HNDL)’ Q1FY26 operating performance was 6% ahead of consensus estimates despite Novelis’ underperformance. Consol. EBITDA, at INR 80.8bn, jumped 6% YoY. Lower Novelis EBITDA, at INR 35.6bbn (-15% YoY; UAD 28mn negative impact due to tariff), was largely compensated by better aluminium EBITDA at INR 42.4bn (+21% YoY; aided by lower CoP and better mix). Copper continues to do well at EBITDA of INR 6.7bn. Net debt also reduced by INR 10bn to INR 343bn. Given, higher-for-longer capex and near-term uncertainty in Novelis, we expect H1’s performance to be muted with improvement emerging H2 onwards. We maintain our HOLD rating on the stock with a target price of INR 720 (6.5x multiple to Novelis and 6x to domestic business for FY27E EV/EBITDA).

Outlook

We maintain our HOLD rating and target price of INR 720 based on 6.5x FY27E EV/EBITDA for Novelis and 6x for domestic business.