InCred Downgrades Hindalco Amid Aluminium Price Concerns
InCred has revised its rating on Hindalco from add to reduce, slashing the target price to Rs 631 from Rs 785. Analysts highlighted that peak aluminium prices are unfavorable for the company's Indian operations, potentially squeezing margins. Additionally, higher capital expenditure is expected to leverage the balance sheet, raising financial risks.
They forecast a significant decline in Hindalco's earnings before interest, taxes, depreciation, and amortisation (EBITDA), projecting a drop to Rs 26,000 crore in FY28 from Rs 36,600 crore in FY26. This downturn reflects broader challenges in the aluminium sector and increased operational costs.
Macquarie Maintains Outperform Rating on L&T
Macquarie has reaffirmed an outperform rating on Larsen & Toubro (L&T) with a target price of Rs 4,620. Analysts noted that L&T is divesting its Nabha Power Plant, aligning with a long-term strategy to exit non-core and asset-heavy businesses. This move is part of a broader effort to streamline operations and focus on more profitable ventures.
The sale of Nabha Power, along with the planned divestment of Hyderabad Metro, is anticipated to enhance the balance sheet and improve capital allocation. Despite the transaction, analysts do not expect a material impact on the target price, as these steps are viewed positively for long-term financial health. L&T is also exploring investments in new-age businesses to drive future growth.
JP Morgan Neutral on Torrent Power Post-Acquisition
JP Morgan has assigned a neutral rating to Torrent Power with a target price of Rs 1,525. This follows the company's announcement of acquiring Nabha Power from L&T for Rs 6,900 crore. The plant comes with a residual power purchase agreement of 13 years, land, and infrastructure for an additional 800MW capacity.
Analysts view the acquisition as financially incrementally positive, citing reasonable valuations and potential upside from capacity expansion and possible renewal of the power purchase agreement for 10-15 years post-expiry. The solid technical health of the equipment further supports this optimistic outlook, though the rating remains neutral pending further execution.
Citigroup Downgrades Ola Electric to Sell
Citigroup has downgraded Ola Electric from buy to sell, halving the target price to Rs 27 from Rs 55. Analysts cited persistent headwinds in volume growth, with electric vehicle penetration in India's two-wheeler sector being more sluggish than anticipated. GST cuts have further slowed electrification efforts, exacerbating challenges.
Ola Electric has lost market share due to service issues, intense competition, and adverse customer perception. Its Q3 results fell below estimates, attributed to negative operating leverage. However, analysts acknowledged impressive gross margin trends and noted that better operating leverage could boost EBITDA in the future. Management's initiatives to improve product and service quality may take time to yield results.
Nuvama Maintains Buy Rating on Ahluwalia Contracts
Nuvama has maintained its buy rating on Ahluwalia Contracts, revising the target price slightly to Rs 1,147 from Rs 1,154. Analysts reported that the company's revenue and margins improved annually, driven by steady execution on key projects. The order book remains robust, indicating strong future prospects.
However, challenges persist, such as the elongated construction ban in the National Capital Region (NCR) due to pollution issues, which has become a recurring annual factor. Despite this, the company's performance and order pipeline support the positive rating.
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