July 6, 2023
Top 10 Stock Hindalco Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Hindalco – Top 10 Stock in Nifty 50 India Index CNX Nifty 50
Hindalco is listed as a top 10 stock on July 06, 2023 in the market index CNX Nifty 50 because of its high performance in at least one of the Obermatt investment strategies. While only half of the consolidated Obermatt Ranks exhibit above-average performance, the professional market sentiment is positive and it may be a solid investment proposition, especially if a growth recovery is to be expected soon. Based on the Obermatt 360° View of 61 (high 61% performer), Obermatt assesses an overall buy recommendation for Hindalco on July 06, 2023.
Snapshot: Obermatt Ranks
| Country | India |
| Industry | Aluminum |
| Index | Energy Efficient, Good Governace Growth Markets, Independent Boards Growth Markets, Water Efficiency, CNX Nifty 50 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Hindalco Buy
| 360 METRICS | July 6, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 83 |
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| GROWTH | ||||||||
| GROWTH | 27 |
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| SAFETY | ||||||||
| SAFETY | 48 |
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| SENTIMENT | ||||||||
| SENTIMENT | 63 |
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| 360° VIEW | ||||||||
| 360° VIEW | 61 |
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ANALYSIS: With an Obermatt 360° View of 61 (better than 61% compared with alternatives), overall professional sentiment and financial characteristics for the stock Hindalco are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Hindalco. The consolidated Value Rank has an attractive rank of 83, which means that the share price of Hindalco is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means that the stock price is lower than for 83% of alternative stocks in the same industry. The consolidated Sentiment Rank has a good rank of 63, which means that professional investors are more optimistic about the stock than for 63% of alternative investment opportunities. But the consolidated Growth Rank has a low rank of 27, which means that the company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. The consolidated Safety Rank has a riskier rank of 48, meaning the company has a riskier financing structure than 52 comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. ...read more
RECOMMENDATION: With a consolidated 360° View of 61, Hindalco is better positioned than 61% of all alternative stock investment opportunities based on the Obermatt Method. Half of the consolidated Obermatt Ranks exhibit above-average performance, but the other half are below market levels. The company enjoys a good value (Value Rank of 83) and positive market sentiment in the professional investor community (Sentiment Rank of 63), but growth expectations are below-average (Growth Rank of 27) and the financing structure is on the risky side(Safety Rank of 48). This combination is rather dangerous, because high debt levels (low safety) require growth to finance the debt burden. The current low growth level may be temporary, because professionals are actually optimistic (positive sentiment). Good value is sometimes an indication that the company's future is challenging. The below-par growth performance may be the reason for this assessment. Companies with less growth typically have a lower price than fast-growing competitors. Even though professional investor sentiment is strong, we recommend further evaluating whether the future of Hindalco is as challenging as the stock's low price suggests. Since the professional community is optimistic, the stock might just be going through a more challenging phase now, indicating that timing might be good now. ...read more
Sentiment Strategy: Professional Market Sentiment for Hindalco positive
ANALYSIS: With an Obermatt Sentiment Rank of 63 (better than 63% compared with alternatives), overall professional sentiment and engagement for the stock Hindalco is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Hindalco. Analyst Opinions are at a rank of 87 (better than 87% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. Analyst Opinions Change is also positive and has a rank of 54 which means that currently, stock research experts are getting even more optimistic about investments in Hindalco. But Market Pulse has a low rank of 44, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 56% of competitors). This is an essential sign of caution, as it could be the forebearer of bad news. Professional Investors are also somewhat absent with a rank of 19, which means that, currently, professional investors hold less stock in this company than in 81% of alternative investment opportunities. Pros tend to invest in other companies. This is expected if the company is of a smaller size (medium or smaller). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 63 (more positive than 63% compared with investment alternatives), Hindalco has a reputation among professional investors that is above-average compared with that of its competitors. While the general news feeds in the professional market are negative, the analyst recommendations are optimistic about the company, and even increase their ratings despite the negative news. This is an ambiguous situation with positive and negative signals from the professional side. Investors should be on the lookout for negative news but not worry too much about it as long as the overall news is still positive. ...read more
Value Strategy: Hindalco Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 83 (better than 83% compared with alternatives) for 2023, Hindalco shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Hindalco. Price-to-Sales (P/S) is 95, which means that the stock price compared with what market professionals expect for future sales is lower than for 95% of comparable companies, indicating a good value regarding Hindalco's revenue size. The same is valid for expected Price to Profits (or Price / Earnings, P/E), more favorable than for 67% of alternatives, and it's also true for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 81. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 44% of all competitors have even lower dividend yields than Hindalco (a Dividend Yield Rank of 44). 56% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 83, is a buy recommendation based on Hindalco's stock price compared with the company's operational size and dividend yields. The below-average dividend yield may be a good sign, as it could mean the company has more attractive investment opportunities for the generated cash than to pay it out as dividends. A low dividend yield can also indicate a growth phase. ...read more
Growth Strategy: Hindalco Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 27 (better than 27% compared with alternatives), Hindalco shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Hindalco. Sales Growth has a below market rank of 27, which means that, currently, professionals expect the company to grow less than 73% of its competitors. The same is valid for Capital Growth, with a rank of 49, and Profit Growth, with a rank of 32. Currently, professionals expect the company to grow its profits less than 68% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 53, which means that the stock returns have recently been above 53% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 27, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Hindalco, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. ...read more
Safety Strategy: Hindalco Debt Financing Safety below-average
| SAFETY METRICS | July 6, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 20 |
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| REFINANCING | ||||||||
| REFINANCING | 83 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 44 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 48 |
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ANALYSIS: With an Obermatt Safety Rank of 48 (better than 48% compared with alternatives), the company Hindalco has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Hindalco is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Hindalco and the other two below average. Refinancing is at 83, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 83% of its competitors. But Leverage is high with a rank of 20, meaning the company has an above-average debt-to-equity ratio. It has more debt than 80% of its competitors. Liquidity is also on the riskier side with a rank of 44, meaning the company generates less profit to service its debt than 56% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 48 (worse than 52% compared with alternatives), Hindalco has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Hindalco are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Hindalco Above-Average Financial Performance
| COMBINED PERFORMANCE | July 6, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 83 |
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| GROWTH | ||||||||
| GROWTH | 27 |
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| SAFETY | ||||||||
| SAFETY | 44 |
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| COMBINED | ||||||||
| COMBINED | 54 |
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ANALYSIS: With an Obermatt Combined Rank of 54 (better than 54% compared with investment alternatives), Hindalco (Aluminum, India) shares have above-average financial characteristics compared with similar stocks. Shares of Hindalco are a good value (attractively priced) with a consolidated Value Rank of 83 (better than 83% of alternatives) but show below-average growth (Growth Rank of 27), and are riskily financed (Safety Rank of 48), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 54, is a buy recommendation based on Hindalco's financial characteristics. As the company Hindalco's key financial metrics exhibit good value (Obermatt Value Rank of 83) but low growth (Obermatt Growth Rank of 27) and risky financing practices (Obermatt Safety Rank of 48), it may be a risky investment, because debt in times of crises can make things worse. The good value, better than 83% of comparable companies, may indicate the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity. ...read more
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