Hindalco rose slightly in a weak market on Tuesday on good buying support from institutions.
The stock of the aluminium major was marginally up by 0.75% at Rs 570 on the BSE. A volume of 7,563 shares was recorded on the counter by 15:20 IST. In the last 12 sessions between 5 and 24 February 2003, the stock shed 7.85% to Rs 565.75 from Rs 614.
Life Insurance Corporation was said to be active on the counter.
Analysts said there was bargain hunting in the stock after a recent fall. In the current year, the aluminium sector may not witness significant growth as the prices are not expected to rise due to the huge pile-up of the white metal in the international markets. Also, after the capacity expansions by Hindalco and Nalco, the prices may come under further pressure, they added.
However, they feel the only positive trigger for the sector is the demand for aluminium from the electrical and automobile industry, which is likely to surge in the second-half of the current year.
Earlier this month, Hindalco announced that it has merged the 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. The record date for the same is 13 March 2003. The respective boards of the two companies had approved the restructuring scheme at separate meetings on 21 July 2002.
For the third quarter (ended 31 December 2002) Hindalco registered a 39% fall in its 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 also 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.
Meanwhile, Hindalco has issued an outlook stating that even as its long-term fundamentals remain excellent, it continues to be cautiously optimistic in the near-term. The medium-and-long-term outlook remains extremely encouraging, it said, even in the face of a temporary setback in the company's operations on account of disruption of its activities in September 2002.
Hindalco expects its branding of foil products to progressively yield results by way of higher sales in the packaging sector. In addition, Hindalco expects to gain from a substantial increase in sales volumes of aluminium alloy wheels. The company said that the completion of the ongoing brown-field expansion projects, and cost reduction measures as well as other initiatives will enable it to make a strong comeback.
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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