Hindalco shares rally 3% as Q1 profit surges 30% YoY. Should you buy, sell or hold?

Hindalco Industries shares rallied 3.4% to their intraday high of Rs 689.80 on the BSE on Wednesday after the company reported a strong 30% year-on-year (YoY) jump in its consolidated net profit for the first quarter of FY26. The aluminium and copper major posted a net profit of Rs 4,004 crore, compared to Rs 3,074 crore in the same quarter last year, with the profit attributable to the company’s owners.

Revenue from operations in Q1 stood at Rs 64,232 crore, marking a 13% increase from Rs 57,013 crore recorded in the corresponding period of the previous financial year. The robust performance in profitability alongside healthy top-line growth is expected to draw investor attention to the stock in the upcoming session.

After the company’s Q1 results, here’s what brokerage firms say:

Motilal Oswal: Buy| Target price: Rs 790

Motilal Oswal Financial Services (MOSL) has maintained its Buy rating on Hindalco, with a target price of Rs 790. The brokerage highlighted that strong performance in the Indian business is driving overall earnings, while Novelis’ EBITDA is expected to rebound in the second half of FY26. Robust domestic earnings are likely to offset muted profitability from Novelis during the year. Additionally, the commissioning of the Bay Minette facility is expected to reduce import dependency and free up US capacities for high-margin products. MOSL noted that the stock is trading at 5.3x EV/EBITDA and 1.2x P/B based on FY27 estimates, with overall estimates largely unchanged and the Buy rating reiterated.

Nuvama: Buy| Target price: Rs 757

Nuvama has maintained its Buy rating on Hindalco, while revising the target price to Rs 757 from Rs 776. The brokerage noted that Novelis earnings appear to have bottomed out but are expected to remain subdued until Q3 FY26. The domestic business is likely to benefit from higher aluminium prices, which should support Q2 FY26 earnings. However, FY26 EBITDA estimates have been cut by 3% due to lower Novelis profits resulting from higher tariffs. This impact is expected to be partially offset by stronger Indian operations. Nuvama also projects net debt to rise to approximately Rs 453 billion by the end of FY27, with a net debt-to-EBITDA ratio at 1.3x.

Avendus: Sell| Target price: Rs 615

Avendus has maintained its Sell rating on Hindalco while raising the target price to Rs 615 from Rs 600. The brokerage highlighted that the Novelis margin outlook remains challenging and noted that current margins are likely at their peak, with aluminium prices potentially correcting by 10–15%. Avendus expects a softening in Chinese and global aluminium demand, with limited supply expected to balance the market over the next 12 months. It values Novelis and India operations at 6x and 5x FY27E EV/EBITDA, respectively, and has reiterated its Sell rating.

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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)