Hindalco Industries shares surged in early trade on Tuesday after global brokerage JP Morgan upgraded the stock to “overweight” from “neutral” and raised its target price, triggering strong investor interest in the metals major.
The stock rose as much as 4 per cent during the session and was trading 3.62 per cent higher at ₹961.20 around 10.41 am, after touching an intraday high of ₹964.90.
JP Morgan expects substantial earnings growth for the sector over the coming quarters, driven by higher London Metal Exchange aluminium prices and favourable currency movements, particularly the depreciation of the Indian rupee. The brokerage noted that geopolitical tensions in West Asia have brought the aluminium market to the edge of a supply-driven bullish cycle, with recent smelter outages likely to persist for months even if shipping through the Strait of Hormuz normalises.
According to the brokerage, these commodity tailwinds could help ease concerns around debt while also making current valuations attractive. It highlighted that prevailing stock prices for Hindalco and its peer Vedanta imply an aluminium price of around $2,900 per tonne, significantly below the current spot level of about $3,500 per tonne.
JP Morgan also pointed to improving fundamentals in Hindalco’s downstream business, stating that earnings at Novelis have likely bottomed out. While energy cost inflation may pose a near-term challenge, the brokerage expects a stronger performance in FY27, supported by the restart of the Oswego plant and improved profitability from higher scrap spreads.
Additionally, Hindalco’s copper segment is expected to see an improved earnings trajectory, aided by a sharp rise in sulphuric acid prices, a key byproduct.
JP Morgan added that the risk-reward profile has turned favourable for Vedanta as well, upgrading the stock to overweight and raising its target price to ₹850 from ₹680, with aluminium and zinc expected to offset weakness in oil and gas volumes.