Hindalco Industries (HNDL IN) – Q4FY26 Result Update – India smelting ahead, Novelis healing gradually – Downgrade to ‘HOLD’
Published on 22 May 2026
We downgrade our rating to ‘Hold’ from ‘Accumulate’ with a revised TP of INR 1,126 (earlier INR 1,043) valuing Hindalco India biz at higher multiple of 7x EV of Mar’28E EBITDA (earlier 6x) on expectation of stronger EBIDTA on higher LME prices (benefitted by disruption in Middle East smelters). We maintain same 6.5x multiple on Novelis as it is still recovering from multiple issues viz. Oswego fire incident, higher tariffs, higher leverage and potential risk of higher scrap pricing. Hindalco Industries (HNDL) delivered largely in-line Q4 cons operating performance, supported by continued strong India performance and sequential improvement in Novelis. Ally hedging and overall inflationary environment for fuel/ raw materials is expected to limit India FY27 EBITDA. Captive mining is still few quarters away and production start from Chakla is delayed to Q4FY27 now Vs H1FY27 earlier.
