Hindalco sees consolidated debt peak at ₹80,000 crore, targets Novelis leverage at 2.5x by FY31

Hindalco Industries has reported that its consolidated debt will peak at ₹80,000 crore by the end of the current fiscal year. This figure includes the leverage from its acquisition of US-based aluminum major Novelis. Despite the elevated debt level, the company has set a clear target to reduce its leverage ratio to 2.5 times earnings before interest, taxes, depreciation, and amortization (EBITDA) by FY31. This strategic roadmap indicates a focus on deleveraging the balance sheet over the medium term.

For investors, the key takeaway is the company's disciplined approach to financial management. Hindalco is banking on the completion of major expansion projects and an improvement in EBITDA margins to generate stronger free cash flow. This cash is expected to be used primarily for debt repayment, signaling a shift toward financial stability. The ability to execute this plan will be crucial for the stock's performance in the coming years.

What to watch next is the pace of debt reduction in the upcoming quarters. Investors should monitor the company's quarterly results to see if the anticipated improvement in free cash flow materializes. Additionally, keeping an eye on the progress of Novelis integration and global aluminum market trends will provide further clarity on the company's path to achieving its leverage target.