Buy Hindalco Industries; target of Rs 804: Prabhudas Lilladher

Prabhudas Lilladher's research report on Hindalco Industries

We attended the new brand identity exhibition organized by Hindalco (HNDL), showcasing the range of products and solutions it offers. The central theme of the event was sustainability, highlighting HNDL’s commitment to eco-friendly practices and sustainable product development to cater to new age requirements and making HNDL greener over the long term. The thrust on specialty alumina was evident due to its wide applications across diverse industries, while HNDL’s efforts in new product development to replace imports and other heavier metals are impressive. With rising usage of aluminum in various new sectors such as building and construction, HNDL plans to introduce revolutionary window & door brands, anti-rust roofing sheets, modular kitchen, etc.

Outlook

We factor in aluminum prices of USD2,593/USD2,632 per ton in FY26/27E. At CMP, the stock is trading at EV of 6.1x/5.4x FY26/27E EBITDA. We roll forward TP on FY27 basis and maintain ‘Buy’ rating with revised TP of Rs804 (earlier Rs696), valuing Novelis at 6.5x & standalone ops at 5x EV of Mar’27E EBITDA.