Hindalco’s share price was climbing in the early hours of trade on Wednesday after the aluminium manufacturer posted strong results for the June quarter.

What Happened: Hindalco’s strong Q1 results saw bullish calls from brokerages, driven by lower aluminium production costs and increased profitability in the copper segment.

Hindalco’s net profit surged by 25% year-on-year to ₹3,074 crore, while consolidated revenue from operations increased 7.5% to ₹57,013 crore in the first fiscal quarter.

Brokerage View: CLSA has issued an “outperform” rating on Hindalco, setting a target price of ₹760 per share. The brokerage noted that despite the spot London Metal Exchange (LME) price being $210 per tonne lower than in Q1, Hindalco’s profitability is expected to be cushioned by an improved product mix and effective hedging strategies.

CLSA also highlighted that Hindalco, with its downstream expansion nearing completion, is now shifting its focus to upstream projects, which are anticipated to drive volume growth and margin expansion.

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Jefferies has also issued a “buy” call on Hindalco, setting a higher target price of ₹800 per share. The brokerage said Hindalco’s India operations are performing well, with strong cost control in aluminium production and improved margins in the copper segment.

Jefferies acknowledged the challenges posed by the recent decline in aluminium prices but pointed out that Novelis, Hindalco’s subsidiary, is benefiting from higher demand for beverage cans.

JPMorgan maintained an “overweight” rating on Hindalco with a target price of ₹725 per share. The firm highlighted that Hindalco has three upstream projects in the pipeline that are not expected to compromise the company’s balance sheet health. However, JPMorgan anticipates a softer EBITDA per tonne in Q2 FY25 due to the recent decline in LME prices.

Hindalco is undergoing an extensive expansion plan, with a capital expenditure of around $8.5 billion over the next five years. This includes $4.9 billion (₹41,120 crore) allocated for Novelis and $3.6 billion (₹30,210 crore) for its India operations.

Analysts at Nuvama Institutional Equities said the capex in India will be internally funded, while the expansion at Novelis is expected to increase Hindalco’s consolidated net debt to ₹38,000 crore by the end of FY26, up from ₹35,500 crore in Q1 FY25.

Nuvama has a “hold” rating on the stock with an unchanged target price of ₹695. Nuvama also noted that Hindalco’s earnings growth over the next three years will largely depend on aluminium prices.

Price Action: Hindalco’s share price was up 1.5% at ₹630.70 near the start of trade on Wednesday.

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