Earlier I had strongly observed that the Market which made a bottom on 20th dec,2011 is now going up systematically making higher top and higher bottom ever since.
On Friday, the Market burned back to a 14 months high with BSE Sensex closed higher at 18465 and CNX Nifty to hit close to 5600 despite technical analysts remain confused guiding bearish view whenever market experienced correction of a rise.
Several stocks on Friday had hit to a new 52wk high with signals for further rise. Bold reforms initiated by the government boosted the market sentiment which was followed by positive global clues such as US fed’s new stimulus package to buy $40Billion of mortgage assets every month till the unemployment outlook improves.
The stock market has now entered into higher orbit and the stock which has been most sluggish will start attracting value buying. Among such stocks there is one stock namely HindalcoInd Ltd.
My earlier eye recommended Tata Steel stock @ Rs 385/- which has already spurted to a high of Rs.405/- on Friday,14th Sep.2012.
HindalcoInd Ltd is a giant company belongs to Aditya Birla Group with its interest in aluminium in domestic and outside with large integrated facilities right from mining to value added products.
The financial performance in 2011-12 has been outstanding both at the stand alone and consoledatedturnoverl was Rs 80820 Cr. and net profit was Rs.3397 Cr. On equity capital of Rs 192 Cr. With an EPS of Rs.17.74 on Rs 1/- paid up share is highly commendable with extra ordinary reserves of Rs.31300 Cr. Which translate into higher book value of Rs.165/- which is highly under priced. The company has however better prospects with a future capex plan of nearly Rs 20,000/-Cr. In hand to be completed in next two years. To sumup the stock looking to the strong fundamentals with a merit of blue chip company should be traded double the book value that is to over Rs 300/-, but sadly speaking the stock is available @Rs118/- as on Friday 14thsep 2012.In my view the stock can hit Rs 200/- gaining 70% on year on year basis from the current market price of RS 110/-.
From: G S ROONGTA (SENIOR ANALYST)
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