Hindalco Industries has been given a "Buy" rating by Prabhudas Lilladher, with a revised target price of Rs 741, down from Rs 847.

The company's Q2FY25 results showed strong operational performance driven by its aluminum business in India and stable results from Novelis. Although Indian business volumes were low, improved pricing and reduced operating costs had a positive impact. The management mentioned a slight increase in coal costs at Mahan and Renukoot operations due to higher spot premiums, but they expect earnings to be supported by rising alumina prices.

However, Novelis may face challenges in the near future due to increased scrap prices and global economic headwinds, which could limit volume growth. Despite these challenges, a strong demand in the beverage can segment, which makes up 58-60% of volumes, is expected to drive a 3.5% volume CAGR over the next two years. The stock is currently trading at an EV of 5.5x/4.8x FY26E/FY27E EBITDA.