Emkay Global has upgraded Hindalco Industries to ‘Buy’ from ‘Reduce’, raising its target price to Rs 900 from Rs 650 earlier. The brokerage cited strengthening aluminium fundamentals, an expected recovery in Novelis margins, and Hindalco’s superior cost positioning as key reasons for the upgrade.

Hindalco’s India operations remain a central pillar of the thesis. With a cost of production at about $1,700 per tonne, well below China’s average of $2,300 per tonne, the company sits on the industry’s leading cost curve. Emkay expects this cost advantage, coupled with robust aluminium prices, to drive strong cash generation of around Rs 300 billion annually, or about 13 per cent of enterprise value, which is sufficient to fund planned capital expenditure and growth initiatives. Advertisement

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