Hindalco Outlook: Hindalco’s prices have slipped by about 9 percent from the intra-day high of Rs 634.6 on Tuesday, but there is a chance of profit up to 30 percent in the future.
Hindalco Outlook: Aditya Birla Group’s aluminum and copper giant Hindalco Industries will invest $ 801 million (Rs 60.70 thousand crore) in the next five years financial year 2023-2027. In this, $ 458 million will be invested in US aluminum subsidiary Novelis and the US will invest $343 million in the Indian operation. After the announcement of the investment plan, its shares have slipped about 8 percent in the last two days and slipped to a price of Rs 574.50 in intra-day on BSE today (March 31).
However, according to market experts, the effect of this investment will be visible on the business of the company and due to the rising price of aluminum, investors have a chance to earn about 30 percent return on buying at the current price. Due to the cost of aluminum, the company’s revenue will increase. Hindalco has weakened in the last two days but so far this year in 2022 it has gained about 20.72 per cent on the BSE and has gained 76.50 per cent in the last one year.
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Experts are placing bets because
- The investment in Novelis will increase Hindalco’s aluminum production capacity by another 1.3 million tonnes per annum.
- Novelis is the world’s second largest aluminum producer and the largest aluminum recycling company. It has a global holding of 40 per cent in Can Bond stock, whose demand is going to remain strong.
- Hindalco is also one of the lowest cost aluminum manufacturing companies and it produces it at a low cost from Utkal Refinery. Its cost is going to come down even further.
- The company is expanding downstream and upstream to increase its aluminum capacity and increase its share in value-added products. Its effect will be reflected in the EBITDA margin.
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so target price
Brokerage firm Motilal Oswal has increased the price of LME (London Metal Exchange) aluminum by about 10 per cent for the financial year 2022-23 and according to this it can reach $ 3300 (Rs 2.5 lakh) per tonne. However, there has been no change in the price estimate for the subsequent financial year 2024 and it may remain at $ 2400 (Rs 1.82 lakh) per tonne as the situation in Europe may normalize by then and the metal crisis may subside. In such a situation, Motilal Oswal has increased the target price for investment from Rs 700 to Rs 750 per share, keeping its buy rating. However, another brokerage firm ICICI Securities has kept its target price at Rs 700 per share.
(The stock recommendations given in the story are those of the respective research analyst and brokerage firm. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
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