'Higher-for-longer' aluminium cycle to lift producer stocks

Shares of Vedanta Aluminium and Hindalco Industries, India's two largest aluminium producers, are likely to gain around 20% from current levels as per analyst estimates. A widening global aluminium deficit (now expected at 1.5 million tons for CY2026 versus 0.3 million tons earlier) and supply disruptions from West Asia facilities are seen keeping metal prices elevated. CLSA has initiated coverage on Vedanta Aluminium with an outperform rating, while Axis Securities has a target price of about 1,250 rupees for Hindalco, citing capacity additions and earnings recovery at its US subsidiary Novelis.