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Deeptha Rajkumar

KOCHI, March 26

Hindalco witnessed large volumes on the bourses today. While the stock closed marginally weak at end of trade, market opinion is that with the company taking steps to consolidate its business, Hindalco is a value stock. The stock ended the day at Rs 550 on the BSE with around 17,168 shares traded. On the NSE, the stock closed at Rs 552 with around 1.54 lakh shares traded.

"First Indal, then Indo Gulf's copper business, and in the future may be Nalco. All this means greater strength and size in balance sheet. Besides, at these levels valuations are attractive," a broker said explaining market interest in the counter.

According to analysts with the company's focus moving from pure aluminium play to total non-ferrous play, the outlook is bullish on the company. "Aluminium is long term play. But the de-risking of its business model makes for better discounting on the stock markets," Mr. Anant Katare, Senior Research Analyst, Paresh Khandwala Securities, said.

"This augurs well for the company as it plans to bid for the Governments stake sale in Nalco. With a stronger balance sheet, the company will not have to enter into a financial tie-up with another player in order to put a competitive bid for Nalco's stake ", an analyst said.

Market analysts opine there would be a future trigger at the counter if the company's bid for Nalco goes through at a competitive price.

"With the company's brownfield capacity expansion at Renukhoot, Uttar Pradesh, on stream and a marginal improvement in aluminium prices, the domestic demand outlook remains positive," an analyst from a leading broking house said. And once the integration of Indo Gulf with Hindalco is completed, the company is reportedly looking at copper mine acquisitions abroad over the next 3-7 months.

"With the restructuring of state electricity boards and power reforms on the cards, the growth prospects of the aluminium sector are immense. In the near term, power and transport will be key drivers for growth of this sector," sources said.

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