Hindalco Industries Ltd is Rated Buy

Current Rating Overview

MarketsMOJO currently assigns Hindalco Industries Ltd a Mojo Score of 78.0, corresponding to a 'Buy' rating. This score reflects a slight adjustment from the previous 'Strong Buy' rating, which had a score of 81. The change in rating occurred on 18 Nov 2025, but it is important to note that all financial data and performance indicators referenced here are as of 28 December 2025. This ensures that investors are evaluating the stock based on the most recent and relevant information available.

Quality Assessment

Hindalco’s quality grade is classified as 'good', underpinned by its robust operational performance and prudent financial management. The company maintains a low average Debt to Equity ratio of 0.48 times, signalling a conservative capital structure that reduces financial risk. Furthermore, Hindalco has demonstrated consistent profitability, declaring positive results for eight consecutive quarters. Its operating cash flow for the year stands at a substantial ₹24,410 crore, while the operating profit to interest coverage ratio is an impressive 11.17 times, indicating strong earnings relative to interest obligations.

Valuation Metrics

The valuation grade for Hindalco is deemed 'attractive'. As of 28 December 2025, the company’s Return on Capital Employed (ROCE) is 13.6%, reflecting efficient utilisation of capital to generate profits. The stock trades at an enterprise value to capital employed ratio of 1.3, which is below the historical average for its peer group, suggesting it is currently undervalued relative to its intrinsic worth. Additionally, the company’s Price/Earnings to Growth (PEG) ratio is a low 0.3, indicating that the stock’s price growth is favourable compared to its earnings growth, a positive sign for value-conscious investors.

Financial Trend Analysis

Financially, Hindalco is rated 'positive' based on its strong growth trajectory. The company’s net sales have grown at an annualised rate of 17.13%, while operating profit has expanded even more rapidly at 25.51% per annum. Profit After Tax (PAT) for the first nine months of the current fiscal year reached ₹14,155.10 crore, marking a growth of 32.02%. These figures highlight the company’s ability to scale operations and improve profitability consistently. The stock’s returns have also been robust, with a year-to-date gain of 45.06% and a one-year return of 38.78%, reflecting strong market confidence in the company’s prospects.

Technical Outlook

The technical grade for Hindalco is 'bullish', supported by recent price momentum and positive market sentiment. The stock has recorded a one-day gain of 1.00%, a one-week increase of 2.47%, and a one-month rise of 9.15%. Over the past three and six months, the stock has appreciated by 17.36% and 26.39% respectively, indicating sustained upward movement. This technical strength complements the company’s solid fundamentals and valuation, reinforcing the 'Buy' rating.

Institutional Confidence

Institutional investors hold a significant 56.56% stake in Hindalco Industries Ltd. This high level of institutional ownership often reflects confidence from sophisticated market participants who have the resources to conduct thorough fundamental analysis. Their continued investment supports the stock’s stability and growth potential, providing an additional layer of assurance for retail investors considering exposure to Hindalco.

Investment Implications

For investors, the 'Buy' rating on Hindalco Industries Ltd suggests that the stock is expected to deliver favourable returns relative to its risk profile. The combination of good quality, attractive valuation, positive financial trends, and bullish technical indicators presents a compelling case for inclusion in a diversified portfolio. While the rating is one notch below 'Strong Buy', it still indicates a strong conviction in the company’s ability to generate shareholder value over the medium to long term.

Summary

In summary, Hindalco Industries Ltd’s current 'Buy' rating by MarketsMOJO reflects a balanced assessment of its strong operational quality, attractive valuation metrics, positive financial growth trends, and supportive technical signals. The company’s prudent financial management and consistent profitability underpin its investment appeal. Investors should consider this rating as an indication that Hindalco remains a favourable stock for those seeking exposure to the non-ferrous metals sector, with potential for continued capital appreciation supported by solid fundamentals.

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