Reuters
Barclays 'not upbeat' on Indian aluminium sector
Edited by : AL CIRCLE
1 min read
Barclays Capital initiates coverage of India's aluminium sector, saying they are "not upbeat" about the fundamentals in the sector because of "spiraling" energy costs and "project execution challenges."
However, Barclays says find valuations of Hindalco Industries "attractive" and initiates the non-ferrous metals producer with an "overweight" rating and a target price of 159 rupees. BarCap adds Hindalco's unit Novelis will benefit from "steady cash flow visibility" and says worries about asset impairments that have hit the stock recently will reverse "steadily" as the company develops captive coal blocks.
Bank is less positive on National Aluminium Company, starts the stock with "underweight" rating and a price target of 49 rupees, saying its valuation premium to global peers is "unjustified."
BarCap says Nalco's "capacity utilization and costs have suffered" from domestic coal shortages and says that is "unlikely" to change in the near term.
Hindalco shares gain 0.4 percent to 121 rupees, while Nalco shares gain 0.3 percent to 59.55 rupees.
However, Barclays says find valuations of Hindalco Industries "attractive" and initiates the non-ferrous metals producer with an "overweight" rating and a target price of 159 rupees. BarCap adds Hindalco's unit Novelis will benefit from "steady cash flow visibility" and says worries about asset impairments that have hit the stock recently will reverse "steadily" as the company develops captive coal blocks.
Bank is less positive on National Aluminium Company, starts the stock with "underweight" rating and a price target of 49 rupees, saying its valuation premium to global peers is "unjustified."
BarCap says Nalco's "capacity utilization and costs have suffered" from domestic coal shortages and says that is "unlikely" to change in the near term.
Hindalco shares gain 0.4 percent to 121 rupees, while Nalco shares gain 0.3 percent to 59.55 rupees.
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