Hindalco Stock Under Pressure Despite Strong Q4, Dividend Announcement; What's Keeping Investors Cautious?

Hindalco shares remained under pressure on Wednesday, despite the aluminium giant reporting an upbeat fourth quarter result for the financial year 2024-25. Hindalco had reported a 66% yearly jump in its net consolidated profit during the March quarter. The company had also announced a 500% dividend.

Hindalco shares traded under pressure in early morning deals today. The stock opened slightly higher at Rs 664.95 per share on the BSE, but soon slipped to an intraday low of Rs 655 apiece. However, the Aditya Birla Group-led company scrip managed to recover some losses during the session and eventually closed marginally higher at Rs 662.85.

Its market capitalisation stood at Rs 1,49,002.35 crore. The company scrip had touched a 52-week high mark of Rs 772 apiece on 3 October, 2024. Hindalco shares are recovering from their 52-week low mark of Rs 546.25 per share on BSE on 7 April, 2025.

Hindalco Q4 Share Price Recommendations

Hindalco is expected to report a healthy consolidate performance for financial year 2026-27 led by strong domestic operations, according to brokerage Motilal Oswal.

"We increase our EBITDA estimates for FY26/27E by 3%/2%. At CMP, the stock trades at 5x EV/EBITDA and 1.2x P/B on FY27E. We reiterate our BUY rating on HNDL with a revised SoTP-based TP of INR 790," noted Motilal Oswal in its report on Wednesday.

Citing Hindalco's strong operating cash flows and decent EBITDA growth, Kotak Institutional Equities maintained a buy rating and reiterated its previous target price for Hindalco.

"HNDL's 4QFY25 consolidated EBITDA came ahead of our estimates, led by strong margins both at the Indian aluminum division and Novelis. Muted commodity prices and macro headwinds should keep earnings range-bound in the near term. Capex toward the next phase of upstream projects in India and completion of the Bay Minette project at Novelis should keep FCF negative over FY2026-27E. Strong operating cash flows would keep net debt/EBITDA under control, with a peak of 1.2X over FY2026-28E. We tweak earnings and revise FV to Rs735. Maintain BUY," noted Kotak Institutional Securities in its report released on Wednesday.

"We upgrade Hindalco (HNDL) to REDUCE from Sell and raise our target price by ~8% to Rs650, from Rs600 earlier. With major concerns largely priced in and a structurally positive outlook on LME aluminium, we believe a SELL is no longer warranted and therefore moving to a neutral stance. HNDL posted a strong Q4 with business EBITDA of Rs97.7bn, which was 8.3% above our estimate," Emkay Global Financial Services noted in its report.

Hindalco Stock Price: Why Was The Stock Under Pressure Today?

Hindalco's volume growth was missing even though the company reported strong Q4 results, meanwhile its subsidiary Novelis is struggling with higher scrap prices and weak global demand, noted Tushar Chaudhari, Research Analyst, PL Capital.

"LME prices will depend upon global macros, which is uncertain in near term. Also Novelis is struggling with higher scrap prices and weak global demand. Novelis has taken various long term mitigating measures to effectively source scrap and reduce costs, which will be the key factors to watch going forward for stock movement," noted Chaudhari.

Despite a strong operational and financial performance in Q4 FY25 where business EBITDA came in 8.3% above estimates and net profit rose 66.5% YoY, the stock declined due to a few key factors including valuation adjustment, high capex outlook, mixed segmental outlook, and moderate growth projections, according to Gaurav Garg, Lemonn Markets Desk.

"Though Novelis delivered stable performance, the management refrained from giving EBITDA guidance. Concerns about scrap cost volatility and the impact of U.S. tariffs on coil imports from the Canadian facility added a layer of uncertainty," noted Garg.

Hindalco Q4 Result

Hindalco reported a 66% annual increase in its net profit for the March quarter to Rs 5,283 crore against Rs 3174 crore reported in the same quarter in financial year 2024. Company's revenue from operations stood at Rs 64890 crore, which was 16% higher than Rs 55,994 crore.

Its consolidated EBITDA during the quarter under review stood at Rs 10,296 crore, which was 43% higher than the year-ago-period. The impressive performance was supported by reduced input costs and positive macroeconomic conditions.

Hindalco's subsidiary Novelis witnessed a strong performance during the fourth quarter against the backdrop of high demand for beverage packaging.

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Hindalco Dividend

The company had announced a dividend of Rs 5 per equity share with a face value of Re 1 per share. Hindalco's board of directors had "Recommended a dividend of ₹ 5 /- (five rupees) per equity share of ₹1/- each for the financial year ended March 31, 2025, subject to the approval of Shareholders at the ensuing Annual General Meeting of the Company."

Hindalco's board of directors had also greenlit the acquisition of 100% stake in EMMRL, which is a wholly owned subsidiary of Essel Mining & Industries Limited (EMIL). The acquisition was finalised for Rs 48 lakhs along with net debt value of Rs 1131 Crore. However, the takeover will be complete only after the approval of the shareholders of the company along with requisite approvals from State Government and Central Government as may be applicable.