The brokerage firm Motilal Oswal has maintained a Buy rating on Hindalco, setting a target price of Rs 770, implying an upside of 16% from the current market price of Rs 664 per share. The firm remains optimistic about Hindalco’s future, citing expansion plans, strong demand, and improving margins as the key catalysts for growth.
Let’s take a look at the three key reasons why the brokerage is bullish on the stock:
Motilal Oswal on Hindalco: Massive expansion plans
Hindalco and its subsidiary Novelis are investing heavily in growth projects. “Hindalco is expanding its aluminum and copper capacities with a total investment of $5.2 billion currently under execution,” as per the brokerage report.
Key projects include:
- Aluminum upstream expansion (Aditya smelter 180 KT, alumina refinery 850 KT)
- Downstream expansion (FRP-170 KT, battery enclosures, etc.)
- Copper smelter expansion (300 KT) and copper recycling (50 KT)
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Novelis, too, is investing $4.1 billion in its Bay Minette facility to boost production. “With these investments, Hindalco is positioning itself as a global leader in the metal industry,” according to the brokerage.
Motilal Oswal on Hindalco: Strong demand outlook
The demand for aluminum and copper is expected to rise significantly. “India’s aluminum consumption is set to double to 11,373 KT by FY35, growing at 8% CAGR, while copper demand is projected to grow 2.5x to 2,540 KT,” as per the brokerage report.
Globally, demand for Flat Rolled Products (FRP) is expected to grow at 4% CAGR, led by beverage packaging and automotive industries.
The brokerage also highlighted that “prices are expected to remain resilient, supported by robust demand, China’s supply cap, and increasing electrification needs.”
Motilal Oswal on Hindalco: Improving margins and debt-free Indian business
Hindalco’s focus on premium products, efficiency, and sustainability is set to improve margins. “Novelis is targeting an adjusted EBITDA of USD 600 per tonne in the long run, driven by increased recycled content and operational efficiency,” according to the brokerage.
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Additionally, Hindalco’s Indian operations are net debt-free. The brokerage report notes that “Hindalco’s consolidated net debt/EBITDA has improved to 1.33x as of December 2024,
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