Financial Daily from THE HINDU group of publications
Sunday, Oct 17, 2004
Financial Daily from THE HINDU group of publications Sunday, Oct 17, 2004 |
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Investment World
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Stocks Markets - Recommendation Hindalco: Long-term buy Krishnan Thiagarajan
INVESTORS may use any near term price weakness to take an exposure in the Hindalco Industries stock with a long-term perspective. The plunge in the international prices of copper and aluminium took a toll on metal stocks, including Hindalco which declined by 9 per cent last week. As the China slowdown factor has reared its head again, any further decline in metal prices cannot be ruled out. But investors can view any price weakness as an opportunity to enter the Hindalco stock. The long-term fundamentals of Hindalco remain unaltered by these short-term blips. The key drivers of Hindalco's growth will continue to be its sustained focus on expansion of its capacities. In aluminium, the combination of good volume growth and a richer product mix and in copper, the recovery of the TC / RC (treatment / refining charges) from the lows of last year may help improve margins. Hindalco trades price earnings multiple of 9 times its expected 2004-05 consolidated per share earnings.
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