September 28, 2023
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 September 28, 2023 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. Based on the Obermatt 360° View of 92 (top 92% performer), Obermatt assesses an overall strong buy recommendation for Hindalco on September 28, 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 Strong Buy
| 360 METRICS | September 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 78 |
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| GROWTH | ||||||||
| GROWTH | 51 |
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| SAFETY | ||||||||
| SAFETY | 44 |
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| SENTIMENT | ||||||||
| SENTIMENT | 77 |
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| 360° VIEW | ||||||||
| 360° VIEW | 92 |
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ANALYSIS: With an Obermatt 360° View of 92 (better than 92% compared with alternatives) for 2023, overall professional sentiment and financial characteristics for the stock Hindalco are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Hindalco. The consolidated Value Rank has an attractive rank of 78, 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 the stock price is lower than for 78% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 51, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. In addition, professional market sentiment is above average compared with other stock investment alternatives with a Sentiment Rank of 77. But the company’s financing is risky with a Safety rank of 44. This means 56% of comparable companies have a safer financing structure than Hindalco. ...read more
RECOMMENDATION: With a consolidated 360° View of 92, Hindalco is better positioned than 92% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 78), above-average growth (Growth Rank of 51), and positive market sentiment in the professional investor community (Sentiment Rank of 77), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the company financing structure is on the riskier side (Safety Rank of 44), but that would also mean better returns for shareholders if things work out well. Good value is sometimes an indication that the company's future is challenging. If they have been growing above average and are still a good value, it may indicate that this will not continue. We recommend evaluating whether the future of Hindalco is as difficult as the low price of the stock, despite good growth and positive professional investor sentiment, suggests. Since the professional community is optimistic, you might have less to worry about, and the stock is just not sufficiently visible right now, which may indicate good timing. ...read more
Sentiment Strategy: Professional Market Sentiment for Hindalco very positive
ANALYSIS: With an Obermatt Sentiment Rank of 77 (better than 77% compared with alternatives) for 2023, overall professional sentiment and engagement for the stock Hindalco is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with three out of four metrics below average for Hindalco. Analyst Opinions are at a rank of 95 (better than 95% of alternative investments), which means that, currently, stock research analysts tend to recommend a stock investment in the company. This is a good sign, were it not for Analyst Opinions Change with a low rank of 48, which means that currently, stock research experts are changing their opinions for the worse. In other words, they are getting more critical of a stock investment in Hindalco. The Professional Investors rank is also low at 38, meaning that professional investors hold less stock in this company than in 62% of alternative investment opportunities. Pros tend to invest in other companies. Even worse, Market Pulse has a low rank of 47, which means that the current professional news and professional social networks are critical of this company (more negative news than for 53% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 77 (more positive than 77% compared with investment alternatives), Hindalco has a reputation among professional investors that is significantly higher than that of its competitors. There are several negative sentiment signals, with only the Analyst Opinions Rank above average. This could be a stock with a long reputation for being positive but where things are worsening. Most analysts may not see it yet, but some have, and the professionals are already quite pessimistic. Proceed with caution when investing in this stock. ...read more
Value Strategy: Hindalco Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 78 (better than 78% 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 93, which means that the stock price compared with what market professionals expect for future sales is lower than for 93% 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 59% 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 75. But, compared with other companies in the same industry, dividend yields are expected to be lower than average; only 47% of all competitors have even lower dividend yields than Hindalco (a Dividend Yield Rank of 47). 53% alternative investments in the same business provide a higher dividend yield. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 78, 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 good
| GROWTH METRICS | September 28, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 32 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 50 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 57 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 67 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 51 |
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ANALYSIS: With an Obermatt Growth Rank of 51 (better than 51% compared with alternatives), Hindalco shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. 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 50 which means that currently professionals expect the company to grow its profits more than 50% of its competitors. The same is valid for capital growth and stock returns. Capital Growth has a rank of 57, and Stock Returns has a rank of 67 which means that the stock returns have recently been above 67% of alternative investments. Only revenue growth is low with a Sales Growth has a rank of 32 (68% of its competitors are better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 51, is a buy 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 below-average
| SAFETY METRICS | September 28, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 20 |
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| REFINANCING | ||||||||
| REFINANCING | 83 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 27 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 44 |
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ANALYSIS: With an Obermatt Safety Rank of 44 (better than 44% 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 27, meaning the company generates less profit to service its debt than 73% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 44 (worse than 56% 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 Top Financial Performance
| COMBINED PERFORMANCE | September 28, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 78 |
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| GROWTH | ||||||||
| GROWTH | 51 |
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| SAFETY | ||||||||
| SAFETY | 27 |
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| COMBINED | ||||||||
| COMBINED | 77 |
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ANALYSIS: With an Obermatt Combined Rank of 77 (better than 77% 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 78 (better than 78% of alternatives), show above-average growth (Growth Rank of 51) but are riskily financed (Safety Rank of 44), which means above-average debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 77, is a strong buy recommendation based on Hindalco's financial characteristics. As the company Hindalco's key financial metrics exhibit excellent performance in two areas, such as good value (Obermatt Value Rank of 78) and above-average growth (Obermatt Growth Rank of 51), it could be argued that the risk-taking in financing (Obermatt Safety Rank of only 44) indicates that the company is optimistic about the future and sees debt as an opportunity to boost returns. More debt means more shareholder returns if everything goes well. However, higher debt burdens are risky when interest rates rise or the business deteriorates in a crisis. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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