With a broader shift in the global metals cycle that could reshape earnings expectations, major Indian aluminium companies are drawing renewed investor attention. JPMorgan has upgraded both Vedanta Limited and Hindalco Industries Limited to “overweight”, citing a favourable mix of higher aluminium prices, inventory disruptions and currency movements. The brokerage has also raised price targets, indicating a potential upside of up to 22 per cent. 

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However, going beyond near-term upside, the shift is being driven by the sharp decline in the global aluminium supply crunch. Ongoing geopolitical tensions spurred by the Middle East conflict have disrupted key supply chains, with smelter outages of EGA and Alba facilities contributing to a mounting supply deficit.

Consequently, the London Metal Exchange (LME) aluminium prices soared, crossing USD 3,500 per tonne once around the middle of March and then after the Iranian strikes on the Gulf smelters. The current levels, too, are hovering around USD 3,500 per tonne.

According to JPMorgan, current valuations of both Vedanta and Hindalco imply an aluminium price of about USD 2,900 per tonne, remaining well below the prevailing spot price of about USD 3,500 per tonne. The gap suggests that the market may not have fully priced in the ongoing supply shock. 

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Price target on Vedanta Limited

Vedanta Limited stands with a price target of INR 850 per share, elevated 25 per cent from the previous INR 680 per share. This indicates a potential upside of 22 per cent from the previous close.  

Vedanta appears to be gaining from a more balanced risk-reward profile. The company’s valuation, estimated at around 4x EV/EBITDA for FY27, has granted it a favourable position, particularly as stronger performance in aluminium and zinc is expected to offset weakness in its oil and gas business.

The Hindalco price target

JPMorgan has raised the price target on Hindalco from INR 875 to INR 1,125 apiece, reflecting a 28.57 per cent increase, thereby implying an upside of 20 per cent from the previous close.

For Hindalco, on the other hand, the outlook is reinforced by expectations that its subsidiary Novelis has likely seen the bottom of its earnings cycle. Going forward, the restart of the Oswego plant and improving scrap spreads are expected to support margins.

Moreover, a weaker rupee can enhance realisations for export-oriented metal companies, further bolstering earnings visibility. Thus, currency movement is another major factor playing in favour of the sector.

Once combined, supply disruption, firm pricing and improving cost dynamics could mark the early stages of a broader reassessment of Indian aluminium stocks.

Risks prevail nonetheless, surrounding the duration of geopolitical tensions and the sustainability of inflated commodity prices. In the present scenario, the sector is stepping out of a phase of caution and transitioning to one of renewed optimism.

Also read: Aluminium market at a crossroads: AICE 2026 to decode global shifts in supply, trade and sustainability

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