Motilal Oswal raises target price for Hindalco, sees upside potential of 15%

This capex will help the company shift its focus from being a core metal manufacturer to a metal-solution provider. The management aims to upscale the share of low-carbon sources to 30% for aluminum production by 2030.

“In India, we believe HNDL is adding downstream capacities at the right time to capture growth opportunities in the domestic market,” said in its report.

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The ongoing capex at Novelis may position Hindalco as the global leader in beverage cans and automotive and any further extension in the capex timeline, along with an increase in capex outlay, will put pressure on the cash flow of the company.

Novelis is also undertaking multiple debottlenecking projects across geographies, which will yield high returns through either additional capacity or cost reduction initiatives.

“Novelis has a current rolling capacity of 4.2MT, which will increase to 4.5MT after the completion of all the debottlenecking projects, and to over 5.1MT after the completion of the Bay Minette facility,” added Motilal Oswal report.

The expansion plan has been delayed by a year and the facility is now likely to be commissioned in 2HCY26, and would take 18-24 months to fully ramp up. Therefore, the domestic brokerage firm believes that any significant incremental volumes will start only in FY 27-28.

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