Hindalco was boosted by reports that demand for aluminium will rise and so will prices.
The stock of India's largest aluminium maker was trading higher by 1.20% to Rs 600 on BSE by 12:14 IST. Volumes of 8,654 shares were recorded on the counter by then. Hindalco has now risen 13.2% from Rs 530.15 on 31 March 2003.
Value buying seems to be the main cause for the rise in Hindalco on Wednesday. The stock seems to be valued cheap considering the bright outlook for the metallurgy sector globally as well as in the domestic market. Analysts say demand for the white metal will rise in the near future, and this should be followed by a rise in prices as well.
In the January-March 2003 period, copper and aluminium prices on LME rose 6.8% and 1.1%, respectively.
Recently, Hindalco announced that it merged Indo Gulf Corporation's copper business with itself. The merger took effect from 12 February 2003. The swap ratio was fixed at 1:12 - one share of Hindalco for every 12 shares of Indo Gulf Corporation.
Analysts call the amalgamation move a sensible one, as it will make Hindalco a larger entity with a bigger balance sheet. This should help Hindalco in garnering larger loans in its bid to acquire aluminium PSU Nalco, whenever the company comes up for divestment.
For the third quarter (ended 31 December 2002), Hindalco registered a 39% fall in net profit to Rs 101.1 crore (Rs 1.01 billion), compared to Rs 165.5 crore (Rs 1.65 billion) in the corresponding period of the previous year. Net sales declined by 9.68% to Rs 521.5 crore (Rs 5.21 billion) from Rs 577.4 crore (Rs 5.77 billion) in DQ 2001.
The promoters hold 23% stake in Hindalco, while the public and institutions hold 13% and 40.5%, respectively.
BSE code: 500440
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