HINDALCO - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.7
| Stock Code | HINDALCO | Market Cap | 2,49,420 Cr. | Current Price | 1,110 ₹ | High / Low | 1,115 ₹ |
| Stock P/E | 28.6 | Book Value | 326 ₹ | Dividend Yield | 0.45 % | ROCE | 12.9 % |
| ROE | 8.98 % | Face Value | 1.00 ₹ | DMA 50 | 1,013 ₹ | DMA 200 | 887 ₹ |
| Chg in FII Hold | 1.80 % | Chg in DII Hold | -1.82 % | PAT Qtr | 3,017 Cr. | PAT Prev Qtr | 2,266 Cr. |
| RSI | 64.1 | MACD | 25.1 | Volume | 42,59,076 | Avg Vol 1Wk | 58,48,836 |
| Low price | 618 ₹ | High price | 1,115 ₹ | PEG Ratio | 11.9 | Debt to equity | 0.18 |
| 52w Index | 98.9 % | Qtr Profit Var | 106 % | EPS | 38.7 ₹ | Industry PE | 18.0 |
📊 Core Financials
- Revenue Growth: Quarterly PAT rose to ₹3,017 Cr from ₹2,266 Cr, showing strong 106% growth.
- Profit Margins: ROE at 8.98% and ROCE at 12.9% indicate moderate profitability.
- Debt Ratios: Debt-to-equity of 0.18 reflects low leverage.
- Cash Flows: Dividend yield of 0.45% provides limited shareholder returns.
- Return Metrics: EPS of ₹38.7 shows steady earnings power.
💹 Valuation Indicators
- P/E Ratio: 28.6 vs industry PE of 18.0, suggesting overvaluation.
- P/B Ratio: Price ₹1,110 vs book value ₹326, trading at ~3.4x book.
- PEG Ratio: 11.9, indicating expensive growth expectations.
- Intrinsic Value: Current price above DMA 50 (₹1,013) and DMA 200 (₹887), showing strong momentum.
🏢 Business Model & Competitive Advantage
Hindalco Industries operates in aluminum and copper manufacturing, with global presence through Novelis. Its competitive advantage lies in scale, integrated operations, and diversified product portfolio. However, profitability metrics are modest compared to valuation levels.
📈 Entry Zone & Long-Term Guidance
Entry zone looks reasonable around ₹1,050–₹1,100 given RSI (64.1) and MACD (25.1) showing bullish momentum. Long-term holding is viable due to industry leadership and global presence, though valuations remain stretched.
✅ Positive
- Strong quarterly PAT growth (106%).
- Low debt-to-equity ratio (0.18) ensures financial stability.
- Stock trading above DMA 200, reflecting strong momentum.
⚠️ Limitation
- P/E ratio (28.6) above industry average (18.0), suggesting overvaluation.
- Dividend yield of 0.45% offers limited income.
- ROE (8.98%) and ROCE (12.9%) are modest compared to peers.
📉 Company Negative News
- DII holding decreased (-1.82%), showing reduced domestic institutional support.
- High PEG ratio (11.9) reflects expensive growth expectations.
📈 Company Positive News
- FII holding increased (+1.80%), showing foreign investor confidence.
- Quarterly PAT surged from ₹2,266 Cr to ₹3,017 Cr.
🏭 Industry
The metals industry is cyclical, driven by global demand for aluminum and copper. Industry PE at 18.0 is lower than Hindalco’s 28.6, suggesting relative overvaluation. Rising infrastructure and EV demand support long-term growth, but commodity price volatility remains a risk.
🔎 Conclusion
Hindalco shows strong profit growth and low debt but trades at premium valuations with modest return ratios. Entry around ₹1,050–₹1,100 is reasonable for investors seeking exposure to metals. Long-term holding is recommended for industry leadership and global presence, though caution is advised due to cyclical risks and valuation multiples.
Would you like me to also compare Hindalco with peers like NALCO, Vedanta, and JSW Steel to evaluate relative strengths in the metals sector?