Market dynamics for India's leading aluminum producers shifted significantly this Tuesday, February 17, 2026, as shares of Hindalco Industries and National Aluminium Company (NALCO) faced selling pressure. The decline followed a strategic downgrade by InCred Equities, which moved both stocks to a "reduce" rating. Analysts point toward a potential 20% correction in aluminum prices over the coming year as macroeconomic support fades and global scrap supply improves. Hindalco Industries saw its stock price decline roughly 3% during the session. The downgrade stems from concerns over a massive capital expenditure program totaling 700 billion INR scheduled between FY26 and FY28. This aggressive expansion is expected to increase balance sheet leverage and push the net debt-to-EBITDA ratio above 2.0 by 2028. Additionally, Hindalco’s U.S. subsidiary, Novelis, is grappling with surging electricity costs driven by high energy demand from data centers, which continues to compress international margins. NALCO shares also dropped approximately 4%, with the brokerage setting a target price of 302 INR, suggesting a double-digit downside from recent peaks. While NALCO recently reported a record net profit of 2,131 crore INR for the December quarter, the outlook is clouded by a projected global surplus of aluminum. The company's 1 million tonne alumina refinery expansion is reaching completion just as alumina prices soften, potentially diminishing the returns on this new capacity. The broader Nifty Metal index slipped 2% as the rally in base metals appeared to peak. While LME aluminum prices have recently hovered near 3,037 USD per tonne, experts warn that these levels may be unsustainable. Increased scrap collection—now at levels significantly above historical averages—is expected to satisfy incremental demand, reducing the need for primary smelting and placing downward pressure on prices. For both companies, the combination of rising capital work-in-progress and cooling commodity prices presents a challenging environment for earnings growth. EBITDA for Hindalco is projected to fall to 260 billion INR by FY28, down from the 366 billion INR estimated for FY26. Investors are now closely monitoring how these industrial giants balance their long-term growth ambitions against a more volatile global pricing landscape.