The price target cut and downgrade comes on the back of results reported by its subsidiary Novelis, whose adjusted Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the quarter was below expectations on lower margins and shipments.
Novelis’ management also expects a larger impact of tariffs on Novelis in the ongoing quarter, with an increase in the section 232 tariffs to 50%.The brokerage wrote in its note that the risk of demand destruction from elevated tariffs is underestimated and it poses further downside risk to their base case.
Novelis took a hit of $60 million during the quarter due to Donald Trump’s tariffs, compared to $28 million in the first quarter.EBITDA on an adjusted basis fell 17% from last year, while EBITDA per tonne on an adjusted basis fell 18% from last year to $432.
Citi has a “buy” recommendation on Hindalco with a price target of ₹800, while CLSA has a target of ₹850 on the stock.
Novelis has guided for EBITDA to have bottomed during the previous quarter with likely improvement in scrap spreads and reducing production costs, despite the impact of tariffs.
Out of the 29 analysts that have coverage on Hindalco, 21 of them have a “buy” rating on the stock, five say “hold”, while three have a “sell” rating.
Hindalco will also be reporting its own June quarter results later today.
Shares of Hindalco ended little changed on Monday at ₹672.85. The stock has remained flat over the last one month, but has gained 14% so far in 2025.
