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Hindalco: A market favourite may face a triple whammy

The triple whammy consists of demand weakness in beverage-can business, slowing housing/construction growth in the US, and coal price rise

September 12, 2022 / 16:01 IST
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A large slice of Novelis' revenue comes from beverage-can sales, especially in the North American market. (Photo by Karolina Grabowska/Pexels)

Hindalco had a great June quarter, posting record-breaking profit figures. Its consolidated profit after tax (PAT) had shot up to Rs 4,119 crore, which was a 48% rise from Rs 2,787 crore in the June quarter a year ago. Its consolidated Ebitda or operating profit had gone up to Rs 8,640, which was a rise of 27 percent year on year.

Both were all-time quarterly highs. Little wonder then that nearly all analysts covering the firm are bullish on the stock. At least 22 analysts have a buy call, and only two have contrary calls – one hold and one sell. The contrarians say that the performance could come under pressure because of slowing demand for beverage cans in the crucial US market, weakening housing/construction sector in the US that can impact specialities sales, and rising coal prices.

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Also read: Market continues to take cues from macro data, global trends: Analysts

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