Rising supply chain inventory and subsiding user fears of stockouts will likely cap primary aluminum and aluminum product prices, in our view. As scrap collection picks up pace, we expect supply chain inventory to rise to 112 days in CY21F from the bottom of 84 days in CY20. Novelis’s gross profits to fall from 2QFY22F and aluminum prices to decline in coming months. High capex will keep debt elevated. Downgrade to Reduce.
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