Hindalco Industries, one of India’s leading non-ferrous metals producers, is poised to redefine its industrial blueprint across aluminium, copper, and speciality materials. In its latest research note, ICICI Securities maintains a 'BUY' rating on Hindalco, revising the 12-month target price upward to Rs 765, offering a 15% upside from current levels of Rs 664. With forward-thinking investments across upstream and downstream segments, bolstered by Novelis' aggressive global capacity expansion, the company appears well-prepared for sustained EBITDA growth, improved return metrics, and deeper self-reliance in energy sourcing.

India Business Targets Fourfold EBITDA Growth by FY30

Hindalco is doubling down on India's industrial resurgence. Management aims to quadruple EBITDA from downstream operations by FY30, compared to FY24.
The company anticipates aluminium consumption to grow at an 8% CAGR, and downstream demand — including extrusions and rolled products — to expand at 9% CAGR over the next decade. Copper demand is similarly expected to compound at 8% annually, largely driven by urban infrastructure, EVs, renewables, and smart city developments.

This translates to capacity expansions across both aluminium and copper segments — including smelters, rolling mills, battery enclosures, and e-waste recycling units — reinforcing Hindalco’s position as a vertically integrated, low-cost producer.

Capex Surge: Rs 150 Billion Peak Investment in FY27

Hindalco has lined up a significant capital expenditure cycle through FY27 to support its ambitious growth targets.

India Capex (FY26–27): Rs 320–400 billion

Novelis Capex: USD 3 billion (primarily for Bay Minette and debottlenecking)

The company is executing projects worth USD 5 billion, including:

850 KTPA Aditya alumina refinery

180 KTPA Aditya smelter expansion

300 KTPA copper smelter in Gujarat

Battery foil, e-waste recycling, and specialty alumina plants

With net debt/EBITDA at 1.3x and India operations in a net cash position, the balance sheet can comfortably support this expansion without compromising financial stability.

Coal Self-Sufficiency to Enhance Cost Efficiencies

Hindalco is aggressively building energy self-reliance, which could significantly reduce input cost volatility in aluminium production.
By FY33, 70% of coal requirements will be met through captive sources, compared to negligible levels today. Two strategic mines — Chakla and Meenakshi — are central to this goal, with ramp-ups scheduled between FY26 and FY29.

This coal security is expected to contribute an additional USD 200/tonne in EBITDA from primary aluminium, driving long-term margin resilience.

Specialty Alumina: The New Growth Pillar

Hindalco is converting its Muri refinery to produce high-value specialty alumina, addressing burgeoning domestic demand in batteries, electronics, and defence.
Domestic specialty alumina demand is projected to rise from 730 KTPA in FY25 to 1,586 KTPA in FY35, reflecting an 8% CAGR. In segments like battery-grade alumina, India’s growth is expected to exceed global averages, growing at 30% annually.

The new product mix could add USD 50/tonne in EBITDA and diversify Hindalco’s exposure beyond cyclical metals pricing.

Novelis: USD 600/Te+ EBITDA Within Sight

Over the last decade, Novelis’ EBITDA/tonne has improved from USD 305 (FY16) to USD 500+ in FY24, largely on account of product mix upgrades and operational efficiency.
Now, Hindalco is targeting USD 600+/tonne EBITDA, driven by:

Higher automotive & specialty grades

Increased recycled content (to reach 75% by 2030 from 63% now)

Debottlenecking projects across Logan (US), Oswego (UK), and Pinda (Brazil)

These initiatives will yield strong operating leverage, with more than USD 300 million in annual cost savings from SG&A cuts and efficiency gains.

Bay Minette: The Billion-Dollar EBITDA Engine

The flagship Bay Minette project in Alabama could generate EBITDA of over USD 1,000/tonne, making it the most profitable asset in the portfolio.

600 KTPA capacity

USD 4.1 billion total investment

Already 85% engineering complete

Commissioning expected by H2CY26

The site has potential for doubling capacity at lower incremental cost, offering a high ROI path in future expansion phases.

Financial Snapshot: Strong Earnings Trajectory

ICICI Securities projects robust financial performance over FY24–27:

Revenue CAGR: 11.7%

EBITDA: Rs 2,38,720 million (FY24) → Rs 3,30,234 million (FY27)

PAT: Rs 1,01,550 million → Rs 1,47,280 million

EPS: Rs 45.6 → Rs 66.1

RoCE: 7.5% → 8.7%

Net Debt/EBITDA: 1.4x → 1.3x

Despite a slight EPS dip in FY27 due to higher depreciation and capex ramp-up, the structural profitability profile remains strong.

Valuation and Investment Levels

Current Price: Rs 664

Target Price: Rs 765

Upside Potential: ~15%

P/E (FY27E): 10.0x

EV/EBITDA (FY27E): 5.5x

RoE (FY27E): 11.0%

Dividend Yield: 0.5%

ICICI has raised its India valuation multiple from 5.5x to 6x EBITDA, acknowledging higher long-term earnings visibility and project momentum.

Technicals and Levels to Monitor

Support: Rs 645

Major Resistance: Rs 705 / Rs 740

Breakout Trigger: Close above Rs 773 (52-week high) with volume confirmation

Positional Target: Rs 765–790 (medium term)

The stock remains in a consolidation phase with institutional accumulation evident.

Risks to Consider

While the long-term outlook remains constructive, investors should monitor:

Volatility in LME aluminium or metal premiums

Slower ramp-up at Bay Minette or Indian smelter expansions

Weaker-than-expected copper TC/RC margins

Global demand shocks impacting Novelis spreads

Nonetheless, the diversification into value-added verticals and backward integration offers robust downside protection.

Bottomline

Hindalco stands at the confluence of India’s industrial renaissance and global decarbonization trends. Its integrated model, disciplined capex, and future-ready product pipeline make it a compelling long-term story. With a blended valuation of 6.3x FY27E EBITDA and a clear pathway to higher returns, ICICI Securities’ 'BUY' call at Rs 765 is anchored in both conviction and fundamentals.