Hindalco’s Q1 Earnings Impress: Brokerages Boost Target Prices and Reiterate ‘Buy’ Calls

Hindalco Industries experienced a drop of over 1% in its share price, trading at Rs 1,046 apiece, despite reporting a remarkable Q1 earnings performance. The company achieved a 75% year-on-year increase in consolidated net profit, reaching Rs 7,013 crore for the first quarter of FY27. Revenue from operations surged 32% to an all-time high of Rs 84,825 crore, underscored by strong growth in the India aluminium and copper sectors, alongside recovery at its subsidiary, Novelis. Consolidated EBITDA for the quarter also demonstrated strong momentum, increasing by 73% year over year to Rs 14,989 crore.

Brokerage firms Motilal Oswal and JM Financial maintained their ‘Buy’ ratings for Hindalco despite the recent stock price dip, projecting significant upside potential. JM Financial raised its target price to Rs 1,230, offering an anticipated 17% upside, while Motilal Oswal set its target at Rs 1,220, implying over 15% potential upside from the previous closing price. Analysts highlighted that the growth trajectory was mainly driven by a robust performance in the domestic aluminium operations, enhanced product mix, and recovering earnings from Novelis as operational headwinds begin to dissipate.

While the first half of FY27 appears strong, expectations for the second half indicate softer performance due to recent corrections in aluminium prices, which have dropped to $3,200 per ton from a peak of $3,850 amid geopolitical tensions in the Middle East. Nevertheless, the broad consensus among analysts remains optimistic, buoyed by the anticipation of solid volume growth in the latter half of the fiscal year, which could support earnings positively despite current market fluctuations.

In a longer-term perspective, Hindalco’s stock has exhibited impressive growth, with returns of 57% over the past year, and a staggering 147% over the last five years. With a market capitalization of Rs 2.37 lakh crore, the firm continues to solidify its position within the metals sector, underpinned by strategic expansions in production capacity and enhancements in downstream projects.

Source: The Economic Times

(Expert Note: This report was prepared by the Wealthova team.)