HSBC has maintained its buy recommendation on Hindalco Industries , setting a target price of ₹1,060 per share for the aluminum and copper major.

Analyst Recommendation Details

The global investment bank's positive stance on Hindalco Industries indicates confidence in the company's prospects. The target price of ₹1,060.00 represents the analyst's assessment of the stock's fair value based on their evaluation criteria.

Market Implications

HSBC's buy rating on Hindalco Industries reflects the investment bank's positive outlook on the company's fundamentals and growth potential. Such analyst recommendations often influence investor sentiment and can impact trading activity in the stock.

The target price provides investors with a benchmark for evaluating the stock's potential performance, though market conditions and company-specific factors will ultimately determine actual price movements.

Hindalco Industries shares are back in focus after HSBC Global Investment Research reiterated its Buy rating and raised the target price, citing growing upside risks to earnings and valuation as global aluminium markets tighten.

HSBC Revises Target Price and Earnings Projections

HSBC has raised its target price on Hindalco to ₹1,060.00 from ₹1,040.00, implying a potential upside of approximately 17% from current levels. The brokerage highlighted that at prevailing spot LME aluminium prices and USD/INR levels, Hindalco's earnings could materially surprise to the upside over the next two financial years.

According to HSBC, if aluminium prices and currency assumptions remain near current levels, the company's earnings per share could significantly exceed expectations. The brokerage noted that aluminium prices have risen faster than earlier assumptions, improving profitability expectations for both Hindalco's upstream operations and its US-based subsidiary Novelis.

Global Aluminium Market Dynamics

A key pillar of HSBC's bullish view centers on increasing visibility of structural tightness in global aluminium supply. The brokerage highlighted several factors contributing to this market dynamic:

• Resilient demand in China despite year-end slowdown
• Output constraints due to China's effective capacity cap
• Limited overseas supply additions
• Upcoming production halt at South32's Mozal smelter from March

HSBC argued that aluminium supply constraints are increasingly policy- and infrastructure-driven, making them difficult to resolve quickly even at higher prices. As investor conviction around aluminium tightness strengthens, the brokerage sees scope for valuation multiples to expand.

Valuation and Subsidiary Performance

Hindalco is currently valued at a blended EV/EBITDA multiple of 6.80x, slightly above its long-term average. However, HSBC believes this premium is justified in the current cycle given the favorable market dynamics.

On the subsidiary front, HSBC expects Novelis' earnings to stabilize from the first quarter of FY27, after being impacted by two fire-related disruptions in recent quarters. While near-term earnings may remain volatile, the market is likely to start pricing in benefits from Novelis' $5.00 billion investment pipeline, which is expected to deliver steady-state EBITDA of approximately $600.00 million over time.

Market Performance and Outlook

HSBC noted that Hindalco has underperformed global aluminium peers over the past year, a gap the brokerage expects to narrow as aluminium fundamentals improve and earnings visibility strengthens. The combination of tightening supply conditions, robust demand dynamics, and the company's strategic positioning through Novelis supports the positive investment thesis.