HINDALCO - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.7
| Stock Code | HINDALCO | Market Cap | 2,16,644 Cr. | Current Price | 964 ₹ | High / Low | 1,030 ₹ |
| Stock P/E | 30.3 | Book Value | 326 ₹ | Dividend Yield | 0.52 % | ROCE | 12.9 % |
| ROE | 8.98 % | Face Value | 1.00 ₹ | DMA 50 | 898 ₹ | DMA 200 | 784 ₹ |
| Chg in FII Hold | 0.03 % | Chg in DII Hold | -0.94 % | PAT Qtr | 2,266 Cr. | PAT Prev Qtr | 1,862 Cr. |
| RSI | 56.8 | MACD | 19.5 | Volume | 45,52,172 | Avg Vol 1Wk | 1,02,12,082 |
| Low price | 546 ₹ | High price | 1,030 ₹ | PEG Ratio | 12.6 | Debt to equity | 0.18 |
| 52w Index | 86.4 % | Qtr Profit Var | 19.8 % | EPS | 31.8 ₹ | Industry PE | 26.8 |
📊 Analysis: Hindalco shows moderate fundamentals with ROE (8.98%) and ROCE (12.9%) below ideal levels for long-term compounding. Valuations are slightly stretched with a P/E of 30.3 compared to industry average of 26.8, and a high PEG ratio (12.6) indicates expensive growth. Dividend yield (0.52%) is modest. Current price (₹964) is above both 50 DMA (₹898) and 200 DMA (₹784), reflecting strong upward momentum. RSI (56.8) suggests neutral-to-slightly overbought conditions, while MACD (19.5) indicates bullish sentiment. The ideal entry zone lies between ₹900–₹930 for long-term investors. If already holding, maintain positions for 3–4 years, leveraging cyclical growth, but consider partial profit booking near ₹1,020–₹1,030 resistance levels.
✅ Positive
- Strong quarterly PAT growth (₹2,266 Cr vs ₹1,862 Cr), +19.8% variation.
- Low debt-to-equity ratio (0.18) ensures financial stability.
- EPS at ₹31.8 provides a solid earnings base.
- FII holdings increased slightly (+0.03%), showing foreign confidence.
⚠️ Limitation
- ROE (8.98%) and ROCE (12.9%) are modest compared to sector leaders.
- High PEG ratio (12.6) signals overvaluation relative to growth.
- Dividend yield (0.52%) is low for income-focused investors.
📉 Company Negative News
- DII holdings decreased (-0.94%), showing cautious domestic sentiment.
- Stock trading near 52-week high (₹1,030), limiting immediate upside.
📈 Company Positive News
- Quarterly profit growth highlights operational resilience.
- MACD (19.5) indicates bullish momentum in near term.
- Strong market cap (₹2.16 lakh Cr) reflects industry leadership.
🏭 Industry
- Metals and aluminum sector benefits from infrastructure and industrial demand.
- Industry PE (26.8) is lower than Hindalco, suggesting peers may offer better valuations.
🔎 Conclusion
Hindalco is a cyclical play with moderate profitability and strong momentum, making it a fair candidate for long-term investment. Ideal entry is around ₹900–₹930. Existing holders should maintain positions for 3–4 years, leveraging cyclical growth, while booking profits near ₹1,020–₹1,030 resistance levels.
Would you like me to extend this with a peer benchmarking overlay (NALCO, Vedanta, Hindustan Zinc) so you can compare Hindalco’s valuation and profitability against its closest metals peers?