ICICIdirect has downgraded Hindalco Industries to 'Sell' with target price of Rs 108 as against current market price (CMP) of Rs 143 in its report.

Commenting on the investment rationale, the broking firm said, ''Hindalco Industries, the non-ferrous metal major had a decent stock price appreciation in the recent past. We however feel that the stock price appreciation has further stretched the company's valuation (core business quoting at 7.6x FY15E EV/EBITDA) amid subdued macroeconomic conditions.

Furthermore, the company's debt levels are expected to remain at elevated levels with meaningful debt reduction only post FY16E. The company is expected to end FY14 with a gross debt of Rs 579.06 billion and net debt of Rs 481.47 billion.

The company's overseas subsidiary Novelis on the other hand has reported subdued performance in the recent past with Q3FY14 EBITDA/tonne coming in at USD 271/tonne.''

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