Hindalco Shares Surge 104% in 3 Yrs; Motilal Oswal Sees 15% Upside In Aditya Birla Stock; Check Target Price

Hindalco Share Price: Shares of Aditya Birla Group's flagship metal company, Hindalco, have surged nearly 104% in three years. Moreover, the stock value has increased by around 17.28% year to date (YTD). The stock opened higher at Rs 697.6 per share on BSE on Monday, days after the company announced the acquisition of US-based AluChem Companies for $125 million.

Hindalco shares were trading 0.22% lower at Rs 696.10 per share on BSE at 11:53 am on Monday with a market capitalisation of Rs 1,56,429.44 crore. Despite opening higher at Rs 698.20 per share on BSE today, the stock declined marginally and touched an intraday low mark of Rs 691.45 per share.

Hindalco's Indian operation is net debt-free, and its subsidiary, Novelis, is expected to report robust growth in the long term as it plans to expand aluminium and copper capacities, noted Motilal Oswal in its report on Monday.

Hindalco Share Price Outlook

The Mumbai-headquartered company is likely to witness stable volume growth across geographies, similarly, its favourable pricing of aluminium is likely to limit its cost pressure and maintain the margins in the medium term.

"The stock is trading at 5.5x FY27E EV/EBITDA and 1.2x FY27E P/B. We reiterate our BUY rating on HNDL with our SOTP-based TP of INR800," noted Motilal Oswal in its report.

Hindalco Share Price Recommendation, Target Price

Reiterating its 'Buy' rating for the Hindalco stock, MOSL, fixed a target price of Rs 800 per share, indicating a 15% upside in the stock valuation in long-term. "The company has recently (4Q concall) downgraded EBITDA margin guidance to 22- 23% vs. earlier guidance of 23-24%, reflecting plans to accelerate marketing/promotion budgets. We expect the cost impact to be front-ended, while the recovery in volumes will likely be gradual. We continue to believe that in a steady macro environment, HUVR will boost its volume performance in FY26/FY27. We reiterate our BUY rating with a TP of INR2,850 (55x P/E FY27)."

Hindalco Business Outlook

Hindalco is likely to capitalise on the strong metal demand driven by rising applications in EVs, electrification, packaging, transportation, RE systems and construction. The company is well-positioned to capitalise on favourable long-term demand and pricing trends. However, its global downstream arm, Novelis, may face pressure for its near-term cash flow due to the US tariff hike.

"Though higher Midwest premiums may partially offset the impact, operational cuts are likely to continue. HNDL's strategic shift toward value-added and premium products with higher recycled content would enhance its NSR and support the margins. We expect HNDL to sustain consol. EBITDA margins at ~13% over FY26-27E," Motilal Oswal added in its report.

While strong cash-order flow and boisterous project pipeline has boosted prospects for the company, delay in capex timeline and cost escalation, rise in aluminum scarp price, and US tariff escalation are key risks for the company's business.

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