December 19, 2024
Top 10 Stock Hindalco Strong 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 Water Efficiency Leaders
Hindalco is listed as a top 10 stock on December 19, 2024 in the market index Water Efficiency because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment where the risk of paying too much for the shares is low, despite a currently slow growth momentum. Based on the Obermatt 360° View of 93 (top 93% performer), Obermatt assesses an overall strong buy recommendation for Hindalco on December 19, 2024.
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 Strong Buy
| 360 METRICS | December 19, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 83 |
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| GROWTH | ||||||||
| GROWTH | 47 |
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| SAFETY | ||||||||
| SAFETY | 53 |
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| SENTIMENT | ||||||||
| SENTIMENT | 89 |
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| 360° VIEW | ||||||||
| 360° VIEW | 93 |
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ANALYSIS: With an Obermatt 360° View of 93 (better than 93% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Hindalco are very positive. The 360° View is based on consolidating four consolidated indicators, with half of the indicators 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 typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 83% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 53. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 89. But the consolidated Growth Rank has a low rank of 47, which means that the company is below average in terms of growth and momentum when looking at financial metrics such as revenue, profit, and invested capital growth as well as stock returns. 53 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 93, Hindalco is better positioned than 93% of all alternative stock investment opportunities based on the Obermatt Method. Three out of four consolidated Obermatt Ranks show above-average performance. The stock has as good value (Value Rank of 83), secure financing practices (Safety Rank of 53), and positive market sentiment in the professional investor community (Sentiment Rank of 89). It is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely to occur. The company’s growth expectations are below the industry average (Growth Rank of 47), but that could also be temporary since professional investors remain optimistic despite the low growth numbers. The low price as reflected in the good Value Rank could indicate that the company's future is challenging. The below-par growth performance may be the reason for this. Companies that grow less are typically cheaper than fast-growing competitors. We recommend evaluating whether the future of Hindalco is as difficult as the stock’s low price suggests, despite the positive professional investor sentiment. Since the professional community is optimistic, you might have less to worry about, and the stock may just go through a more challenging phase now, indicating good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Hindalco very positive
ANALYSIS: With an Obermatt Sentiment Rank of 89 (better than 89% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Hindalco is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all four indicators above average for Hindalco. Analyst Opinions are at a rank of 72 (better than 72% 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 with a rank of 66, which means that stock research experts are changing their opinions for the better and recommending investing in the company. They are getting more optimistic about stock investments in Hindalco. The Professional Investors rank is 63, which means that currently, professional investors hold more stock in this company than in 63% of alternative investment opportunities. Pros tend to favor investing in this company. Finally, Market Pulse has a rank of 62 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 62% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 89 (more positive than 89% compared with investment alternatives), Hindalco has a reputation among professional investors that is significantly higher than that of its competitors. Since all market sentiment indicators are positive, the professional community highly recommends investment in the company. Does this mean Hindalco stocks are a safe investment? Far from it. Even professionals make mistakes. Especially in stock investing, there is a tendency to follow the leaders. Since trees don't grow to the heavens, such positive sentiment may also be interpreted as a danger sign. A lot of optimism can often be a sign of troubles to come, albeit unforeseen by most. ...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 2024, 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 85, which means that the stock price compared with what market professionals expect for future sales is lower than for 85% 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 74. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 45% of all competitors have even lower dividend yields than Hindalco (a Dividend Yield Rank of 45). 55% 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
| GROWTH METRICS | December 19, 2024 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 12 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 69 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 67 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 55 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 47 |
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ANALYSIS: With an Obermatt Growth Rank of 47 (better than 47% 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 all but one indicator above average for Hindalco. Profit Growth has a rank of 69 which means that currently professionals expect the company to grow its profits more than 69% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 67, and Stock Returns has a rank of 55 which means that the stock returns have recently been above 55% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 12 (88% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 47, is a hold recommendation for growth and momentum investors. The many positive growth indicators indicate a positive growth momentum with only low revenue growth. That can also be attributed to divestments or the sale of unprofitable businesses. If that is the reason, overall growth is well on track to making this stock attractive for growth investors. ...read more
Safety Strategy: Hindalco Debt Financing Safety above-average
| SAFETY METRICS | December 19, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 34 |
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| REFINANCING | ||||||||
| REFINANCING | 75 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 37 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 53 |
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ANALYSIS: With an Obermatt Safety Rank of 53 (better than 53% compared with alternatives), the company Hindalco has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Hindalco is safe, it only means that the company is on the safer side regarding possible bankruptcy, 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 75, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 75% of its competitors. But Leverage is high with a rank of 34, meaning the company has an above-average debt-to-equity ratio. It has more debt than 66% of its competitors. Liquidity is also on the riskier side with a rank of 37, meaning the company generates less profit to service its debt than 63% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 53 (better than 53% compared with alternatives), Hindalco has a financing structure that is safer 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 Top Financial Performance
| COMBINED PERFORMANCE | December 19, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 83 |
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| GROWTH | ||||||||
| GROWTH | 47 |
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| SAFETY | ||||||||
| SAFETY | 37 |
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| COMBINED | ||||||||
| COMBINED | 79 |
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ANALYSIS: With an Obermatt Combined Rank of 79 (better than 79% compared with investment alternatives), Hindalco (Aluminum, India) shares have much better financial characteristics than comparable stocks. Shares of Hindalco are a good value (attractively priced) with a consolidated Value Rank of 83 (better than 83% of alternatives), are safely financed (Safety Rank of 53, which means low debt burdens), but show below-average growth (Growth Rank of 47). ...read more
RECOMMENDATION: A Combined Rank of 79, is a strong 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 47) while being safely financed (Obermatt Safety Rank of 53), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 83% of comparable companies, may also indicate that 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 and the downside is limited due to below-average financing risks. ...read more
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