THE HINDU Business Line
Hindalco Industries: Buy
Edited by : AL CIRCLE
1 min read
The domestic aluminium operations with better margins will be the key driver for both sales and profit growth.
Investors with a long-term perspective can consider buying shares in aluminium major, Hindalco Industries, despite upheavals in the global economy and the likely pressure on commodity prices. The company's integrated domestic aluminium business and the much-improved global operations (Novelis) have the potential to weather the ongoing storm in aluminium prices more effectively than global peers.
A 25 per cent slide in the stock's price in a span of six months has Hindalco trading at Rs 134 (P/E 10.8 times consolidated FY11). This is at a discount to domestic peer, Nalco (P/E 15.6). Also, given its superior margins and large expansion plans, Hindalco's EV/EBIDTA of 6.5 times compares favourably to that of international peers such as Alcoa, Chalco and Rusal.
Investors with a long-term perspective can consider buying shares in aluminium major, Hindalco Industries, despite upheavals in the global economy and the likely pressure on commodity prices. The company's integrated domestic aluminium business and the much-improved global operations (Novelis) have the potential to weather the ongoing storm in aluminium prices more effectively than global peers.
A 25 per cent slide in the stock's price in a span of six months has Hindalco trading at Rs 134 (P/E 10.8 times consolidated FY11). This is at a discount to domestic peer, Nalco (P/E 15.6). Also, given its superior margins and large expansion plans, Hindalco's EV/EBIDTA of 6.5 times compares favourably to that of international peers such as Alcoa, Chalco and Rusal.
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