Hindalco Future Price Forecast: A Comprehensive Analysis

Introduction

Hindalco Industries Limited is a leading Indian Aluminium and Copper manufacturing company, and is one of the biggest players in the global non-ferrous metals industry. Founded in 1958, the company has operations in 13 countries and has a diverse range of products such as Aluminium, Copper, Novelis, and Aleris. The company has a strong market presence in segments such as transport, packaging, construction, and industrial machinery. In this article, we will analyze Hindalco’s past performance, current market position, and provide a future price forecast for the company.

Past Performance Analysis

Hindalco Industries Limited has seen steady growth in the past few years. Hindalco’s consolidated revenue for the financial year 2020 was INR 1,06,817 crore ($14.6 billion), which is a 7% increase from the previous year. The aluminum business, which contributes around 80% of Hindalco’s revenue, saw its revenue grow by 4% during the same period, while Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) grew by 10%.

Hindalco’s revenue growth was mainly driven by higher volumes and better realizations. In the aluminum business, higher volumes were supported by the ramp-up of Utkal Alumina refinery, which increased its capacity from 1.5 million tonnes per annum (MTPA) to 2.1 MTPA. Additionally, the copper business grew by 21% which was supported by better realizations and higher volumes.

The company has had a steady growth in the past few years, which is expected to continue in the future.

Future Price Forecast

Hindalco’s future price forecast looks promising due to several factors. The company has made several investments in the past few years, which has resulted in capacity expansion, better realizations, and higher volumes. Additionally, the aluminum industry is expected to see steady growth in the future due to the increasing demand for lightweight, durable, and eco-friendly materials.

According to market analysts, Hindalco’s revenue and earnings are expected to grow at a CAGR of 8% and 15%, respectively, over the next five years. The demand for aluminum in India is expected to grow at a CAGR of 6.5% from 2018-2023, which will be supported by the development of infrastructure in the country.

Moreover, Hindalco’s investments in renewable energy are expected to result in cost savings and better margins, which will further boost the company’s profitability. The company has set a target of achieving 600 MW of renewable energy capacity by 2020, which it has successfully achieved. This will help the company in reducing its carbon footprint and making its operations more eco-friendly.

The global demand for aluminum is also expected to grow in the future, driven by the automobile, aerospace, and construction industries. This will bode well for Hindalco, as it has a strong market presence in these segments. The company’s acquisition of Novelis in 2007, which is a global leader in rolled aluminum products, has also helped Hindalco in diversifying its product portfolio and gaining market share.

Based on the aforementioned factors, we can expect Hindalco’s stock prices to grow steadily in the future. The company’s current stock prices are around INR 377, and we can expect it to reach INR 450-500 in the next 2-3 years. However, investors should be mindful of the risks associated with commodity prices, exchange rates, and global economic uncertainties.

Conclusion

To conclude, Hindalco Industries Limited is a leading player in the global non-ferrous metals industry, and has had a steady growth in the past few years. The company’s investments in capacity expansion, renewable energy, and acquisitions have resulted in better realizations, higher volumes, and cost savings. The future price forecast for Hindalco looks promising, driven by the increasing demand for aluminum in India and globally, and the company’s market presence in segments such as transport, packaging, construction, and industrial machinery. However, investors should be cautious and evaluate the risks associated with commodity prices, exchange rates, and global economic uncertainties.