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Indian Non-Ferrous Metals Sector: Government push for rise in recycled content

ICICIdirect Research 23 Aug 2024 DISCLAIMER

As per media sources, government is likely to mandate that all new products made from non-ferrous metals to have a minimum of 5% recycled content starting FY28E.
This shall further increase progressively and by FY31E, government intends products made from aluminium should have 10% recycled content, those made from copper should have 20% recycled content and zinc applicants should have 25% recycled content.
This is largely following the principal that these metals are rust free and involve energy intensive production process from mining to smelting and finishing.
We believe this is a step in the right direction from both sustainability perspective as well as judicious use to country’s mineral resources.
For Copper and Aluminium metal, India is still a net importer and hence it will have no impact on metal producers operating in this space such as Hindalco however it might marginally lower the primarily demand of Zinc metal impacting Hindustan Zinc.
These are however initial prints and we shall closely monitor developments in this space.
We have a BUY rating on Hindalco with a target price of ₹ 825

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