Pick of the Week: Hindalco

FOR MEDIUM TERM BUY BUY HINDALCO

Equity: 175.32 Cr., BSE Code: 500440 (Rs. 64.20)


Buy: HINDALCO @ 64 to 65 Target 72 to 74

Hindalco Industries Limited, a flagship company of the Aditya Birla Group, is structured into two strategic businesses Aluminum and Copper and is an industry leader in both. A metals powerhouse with a turnover of US$ 14 billion, Hindalco is the world's largest aluminum rolling company and one of the biggest producers of primary aluminum in Asia. Its copper smelter is today the world's largest custom smelter at a single location. Established in 1958, Hindalco commissioned its aluminum facility at Renukoot in eastern U.P. in 1962 and has today grown to become the country's largest integrated aluminum producer and ranks among the top quartile of low cost producers in the world. With a strategic intent to achieve vertical integration in the copper business, Hindalco acquired two captive copper mines in Australia Nifty and Mt. Gordon through Aditya Birla Minerals Limited. The aluminum division's product range includes alumina chemicals, primary aluminum ingots, billets, wire rods, rolled products, extrusions, foils and alloy wheels. The company's copper product range includes copper cathodes and continuous cast copper rods. It also produces precious metals, sulphuric acid, phosphoric acid, dominium phosphate (DAP) and other phosphoric fertilizers, and phosphor-gypsum. In May 2007, Novelis became a Hindalco subsidiary with the completion of the acquisition process. The transaction makes Hindalco the world's largest aluminum rolling company and one of the biggest producers of primary aluminum in Asia, as well as being India's leading copper producer. The stock has come down from over 200 levels to around 160 to 170. One can buy at current levels for a gain of 30-40 % upside in 6-8 months. Sales and NP for year ended 07-08 were 18982.6 Cr & 2812.9Cr. Sales and NP for latest Quarter 4647.5Cr & 696.8Cr. On YOY basis NP has increased by 11% & based on quarter latest its increased by 16% Dividend during year ended 07-08 was 185%