Hindalco shares jumped 26% in six months; can the stock revisit Rs 500 level again?

Shares of Hindalco Industries Ltd have gained 25.50 per cent in the past six months, outperforming benchmark BSE Sensex's 17.30 per cent rise during the same period. The stock on Monday settled 2.70 per cent lower at Rs 484.05 on BSE. At this price, it has declined 4.86 per cent from its 52-week high of Rs 508.80, a level seen last week on September 14. Despite this fall, the scrip has surged 34.91 per cent from its one-year low price of Rs 358.80, hit on September 28, 2022.

The company has recently signed a technology partnership with Italy-based Metra SpA to enable the production of large-size aluminium extrusion and fabrication technology for building high-speed aluminium rail coaches in India. It said the tie-up provides Hindalco the launching pad to drive the ambitious upgradation programme of Indian Railways.

This is in line with our capability building for aluminium in commercial vehicles, freight wagons, electric vehicles and passenger train applications, said Satish Pai, Managing Director of Hindalco.

To help make passenger coaches for Vande Bharat trains, Hindalco said it plans to invest Rs 2,000 crore for the project and the alliance will provide the cutting-edge technology for this effort.

Collaborating with Hindalco presents an exciting opportunity to showcase the capabilities of our aluminium extrusion technology on a global stage, said Enrico Zampedri, CEO of Metra SpA.

On technical setup, an analyst said a decisive breakthrough above Rs 500 level is required to trigger the next round of rally. On the flip side, one of the analysts suggested that the counter may fall in the near term.

"Charts are looking good, suggesting for positional target of Rs 550. Keep stop loss placed at Rs 480," Akshay Bhagwat, Senior Vice-President, Derivatives Research at JM Financial Services, told BT TV.

"The stock has seen a strong spurt in price-volume leading it to test the previous swing high of Rs 500 zone. The technical structure construes a positive development with a rounding bottom formation in the counter. But historically, Rs 500 level has been a critical resistance zone and a decisive and sustainable breakthrough could only trigger the next round of rally. While on the downside, support is placed around Rs 475-470," said Osho Krishan, Senior Analyst, Technical & Derivative Research at Angel One.

The counter has a near term target price of Rs 520, said Vaishali Parekh, Vice-President - Technical Research at Prabhudas Lilladher.

Hindalco looks bullish on the daily charts and could test next resistance of 549, said AR Ramachandran from Tips2trades. Although, the analyst mentioned that a close below Rs 486 could lead to lower target of Rs 418 in the near term.

Meanwhile, Indian equity benchmarks were closed today on account of Ganesh Chaturthi. The domestic bourses would reopen on September 20.

 

(Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)