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Shares of Hindalco Industries gained the most in 2-1/2 months. The stock climbed as much as 6.2 per cent to Rs 213.25, and was the top percentage gainer on the NSE index.
Hindalco stock was on track to snap 4 sessions of losses; it posted biggest intraday gain since January 23. The stock has undergone correction on concerns about Novelis unit’s margins post US trade restrictions, weak aluminium prices and risk-off on trade tensions, according to Macquarie Research.
Macquarie has cut the price target to Rs 296 from Rs 328; it has kept “outperform” rating. The revised price target suggested 40 pct potential upside, offering most attractive risk reward in its coverage, it said.
Risk-reward is positive as aluminium prices are likely near a floor as low margins/losses at Chinese smelters should re-balance supply, Novelis should be unaffected by US tariffs, and strong free cash flow offers option to pursue growth opportunities, Jefferies said in a note.
About 25 of 29 analysts covering the stock have a “buy” or higher rating, 3 “hold” while 1 rates it at “strong sell”; their median price target is Rs 309.50, according to Thomson Reuters Eikon data.
The stock has fallen 26.6 per cent this year up to Wednesday vs 12 per cent decline in Nifty metal index.
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