Current Rating and Its Significance
MarketsMOJO’s 'Buy' rating for Hindalco Industries Ltd indicates a positive outlook on the stock, suggesting it is expected to outperform the broader market over the medium term. This rating reflects a balanced assessment of the company’s quality, valuation, financial trend, and technical indicators. Investors should view this as a recommendation to consider adding or holding the stock within a diversified portfolio, based on its current fundamentals and market positioning.
Quality Assessment
As of 11 February 2026, Hindalco maintains a good quality grade, underpinned by a robust financial structure and consistent operational performance. The company’s debt-to-equity ratio stands at a conservative 0.48 times, signalling prudent leverage management. This low gearing reduces financial risk and provides flexibility for future growth initiatives.
Moreover, Hindalco has demonstrated healthy long-term growth, with net sales increasing at an annualised rate of 17.13% and operating profit expanding at 25.51%. The firm’s ability to sustain positive results over eight consecutive quarters further attests to its operational resilience and effective management strategies.
Valuation Considerations
The stock’s valuation is currently graded as fair. Hindalco trades at an enterprise value to capital employed ratio of 1.4, which is below the average historical valuations of its peers in the non-ferrous metals sector. This discount suggests the stock is reasonably priced relative to its capital base and earnings potential.
Additionally, the company’s return on capital employed (ROCE) is 13.6%, reflecting efficient utilisation of capital to generate profits. The price-to-earnings-to-growth (PEG) ratio stands at a low 0.3, indicating that the stock’s price growth is favourable relative to its earnings growth, which is a positive signal for value-conscious investors.
Financial Trend and Profitability
Hindalco’s financial trend remains positive as of 11 February 2026. The company reported a profit after tax (PAT) of ₹14,155.10 crores for the nine months ended, growing at an impressive 32.02%. Operating cash flow for the year reached a peak of ₹24,410 crores, highlighting strong cash generation capabilities.
The operating profit to interest coverage ratio is at a robust 11.17 times, indicating ample earnings to cover interest expenses and signalling financial stability. Over the past year, the stock has delivered a total return of 60.12%, while profits have risen by 37.3%, underscoring the company’s strong earnings momentum.
Technical Outlook
The technical grade for Hindalco is bullish, reflecting positive price momentum and favourable chart patterns. Recent price movements show resilience despite short-term volatility, with the stock gaining 5.83% over the past month and 42.03% over six months. Year-to-date returns stand at 7.66%, although the stock experienced a slight dip of 1.49% on the latest trading day.
High institutional ownership at 55.86% further supports the technical outlook, as these investors typically conduct thorough fundamental analysis and provide stability to the stock price through informed trading decisions.
Sector and Market Context
Operating within the non-ferrous metals sector, Hindalco benefits from cyclical demand drivers and global commodity trends. The company’s large-cap status and diversified product portfolio position it well to capitalise on industrial growth and infrastructure development in India and abroad.
While the sector faces challenges such as raw material price fluctuations and regulatory changes, Hindalco’s strong fundamentals and prudent financial management provide a buffer against volatility, making it an attractive option for investors seeking exposure to metals with growth potential.
From struggle to strength! This Small Cap from Textile - Machinery is showing early turnaround signals that look promising. Position yourself now for explosive growth potential ahead!
- - Early turnaround signals
- - Explosive growth potential
- - Textile - Machinery recovery play
Implications for Investors
For investors, the 'Buy' rating on Hindalco Industries Ltd suggests a favourable risk-reward profile based on current data. The company’s strong earnings growth, sound financial health, and reasonable valuation provide a solid foundation for potential capital appreciation.
Investors should consider the stock as part of a diversified portfolio, recognising that while the sector may experience cyclical fluctuations, Hindalco’s operational strengths and institutional backing offer a degree of stability and growth potential.
It is also important to monitor ongoing market conditions and company updates, as commodity prices and global economic factors can influence performance. Nonetheless, the current rating reflects confidence in Hindalco’s ability to deliver value over the medium term.
Summary
In summary, Hindalco Industries Ltd’s 'Buy' rating as of 18 November 2025 remains justified by its strong quality metrics, fair valuation, positive financial trends, and bullish technical outlook as of 11 February 2026. The company’s consistent profitability, low leverage, and attractive returns make it a compelling choice for investors seeking exposure to the non-ferrous metals sector.
With a market capitalisation categorised as largecap and a significant institutional investor base, Hindalco is well-positioned to capitalise on growth opportunities while managing risks effectively.
Key Financial Highlights as of 11 February 2026
- Debt to Equity Ratio: 0.48 times
- Net Sales Growth (Annualised): 17.13%
- Operating Profit Growth (Annualised): 25.51%
- Operating Cash Flow (Yearly): ₹24,410 crores
- Operating Profit to Interest Coverage: 11.17 times
- Profit After Tax (9 months): ₹14,155.10 crores (32.02% growth)
- Return on Capital Employed (ROCE): 13.6%
- Enterprise Value to Capital Employed: 1.4
- PEG Ratio: 0.3
- Stock Returns: 1 Year +60.12%, 6 Months +42.03%, 3 Months +20.19%
- Institutional Holdings: 55.86%
Conclusion
Hindalco Industries Ltd’s current 'Buy' rating reflects a well-rounded assessment of its business quality, valuation, financial health, and market momentum. Investors looking for exposure to the metals sector with a company demonstrating strong fundamentals and growth prospects should consider this stock favourably.
Unlock special upgrade rates for a limited period. Start Saving Now →
