Hindalco, Vedanta Gain up to 3% As JPMorgan Sees up to 22% Upside

Mumbai, April 7:Shares of Hindalco Industries and Vedanta Limited rose up to 3 percent in trade on Tuesday after global brokerage JPMorgan upgraded both stocks, citing expectations of sustained higher aluminium prices and improving profitability.

JPMorgan upgraded the two companies to “overweight” from “neutral” and raised their price targets, implying a potential upside of up to 22 percent.

Hindalco shares climbed over 4 percent intraday to around ₹964 on the NSE, extending gains for a fifth straight session and rising nearly 10 percent over this period. Meanwhile, Vedanta shares also advanced over 4 percent to around ₹718.

The brokerage has increased Hindalco’s target price to ₹1,125 from ₹875, indicating about 20 percent upside from previous levels. For Vedanta, the target has been raised to ₹850 from ₹680, implying a potential upside of around 22 percent.

JPMorgan said the outlook for aluminium prices remains strong, supported by geopolitical tensions in West Asia that could keep prices elevated for a longer period. Supply disruptions due to smelter outages and tight global inventories are also expected to support prices.

For Hindalco, the brokerage highlighted improving prospects for its subsidiary Novelis, noting that earnings have likely bottomed out. The restart of the Oswego plant and better scrap spreads are expected to support profitability going forward.

On Vedanta, JPMorgan said the risk-reward has turned favourable, with the stock trading at around 4 times FY27 estimated EV/EBITDA. Strength in aluminium and zinc businesses is expected to offset weakness in the oil and gas segment.

The brokerage added that tailwinds from the commodity cycle, along with a recent correction in stock prices, have made valuations more attractive and could help ease debt concerns for both companies.

Source: https://www.nseindia.com/