Hindalco Industries in recent
years struggling with global meltdown in commodity price and impacted its
fortune dearly. The meltdown in China, unrest in Middle East and recession in
Europe impacted the global demand of Aluminum and Copper.
The meltdown in global economy
impacted the global price of both the commodity and inturn inflicted on
Hindalco Industries profitability.
Now it seems that they are turning the table
upside down. In last quarter, they reported 5 fold increase in profitability
with lower than expected revenue. Basically revenue got impacted due to planned
copper manufacturing center maintenance.
By improving the operational
efficiency Hindalco Industries managed to save and hence successfully
demonstrated their capabilities to maintain the profitable business.
As Indian economy is turning
corner as well as USA economy is picking up; it is expected that commodity
price is going to go up and the indication is already there will growing Coal
price in the International market.
At the same time, HindalcoIndustries is also getting lots of support from global energy price and i am
expecting that energy price will be subdued for next many quarter.
The share price jumped and gained
more than 30% before retracting around 12%. I am expecting that Hindalco
Industries share price is undervalued and will reach around 240 INR in next 14
to 16 month. Value Investor may look
into the company may start accumulating the share during market sell off as
worst is over for Hindalco Industries.
I will not recommend investor to
play in F&O market. I also recommend reader to consult their financial
advisor before investing
About Devendra Prasad
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