Hindalco shares down 35% from 52-week high; good time to buy?

Shares of aluminium producer Hindalco Industries have plunged 35 per cent from their 52-week high hit in March 2022. Hindalco stock, which touched a 52-week high of Rs 636 on March 23, 2022 was trading at Rs 412 on BSE today, down 35.22 per cent during the period. Later, the Hindalco stock touched an intraday high of Rs 419, rising 2.03 per cent from the previous close of Rs 410.65. Hindalco shares are trading higher than the 5-day, 20-day, 50-day and 100-day moving averages but lower than 200-day moving averages.

However, Hindalco shares stand 35.59 per cent higher against the 52-week low of Rs 309. The stock hit a yearly low on June 20, 2022.  In 2022, Hindalco shares have lost 11.86 per cent and declined 11.36 percent in a year.

Market cap of the firm rose to Rs 93,842 crore in today's trade. Total 0.85 lakh shares of the firm changed hands amounting to a turnover of Rs 3.53 crore on BSE.

Similarly, the BSE metal index has slumped 13 per cent or 2,921 points from March 23, 2022 till date. The index was trading 340 points higher at 19,666 today. However, it has lost 17.17 per cent from its 52-week high of 23,743 hit on April 11 this year.  In Q1 of this fiscal, the firm reported a 47.8 percent rise in its consolidated net profit to Rs 4,119 crore against Rs 2,787 crore recorded a year ago.

This was the highest quarterly consolidated profit after tax for the company. On a sequential basis, profit climbed 7 per cent from Rs 3,851 crore earned during the January - March period.

Revenue of the Aditya Birla Group flagship company zoomed 40.3 percent to Rs 58,018 crore compared to a revenue of Rs 41,358 crore logged in the year-ago quarter. On a sequential basis, revenue rose 4 per cent from Rs 55,764 crore recorded in the previous quarter.

In the second quarter of this fiscal, the metal and minings major is likely to report a 64.4 per cent fall in net profit for its India business to Rs 646.4 crore against a profit of Rs 1,815.0 crore in the corresponding quarter of the previous fiscal.

However, sales are likely to rise 10.6 percent to Rs 19,081.1 crore in Q2 against sales of Rs 17,249 crore a year ago, according to estimates of Kotak Institutional Equities.

The stock of the metal and mining major is among the top picks of investors along with Tata Steel, JSW Steel and National Aluminium among others.

Here's a look at what analysts said on the prospects of the Hindalco stock post the recent correction.

Tirthankar Das, Technical & Derivative Analyst, Retail, Ashika Stock Broking sees Hindalco stock as a good 'buy'.

"The share price of Hindalco is seen rebounding, taking support at the recent trend line breakout area joining the recent highs since April 2022 and the 20 days EMA (currently placed at 402 levels) thus offering a fresh entry opportunity. Hence, it can be expected that the stock is likely to maintain a positive bias and head towards 445 levels in the coming sessions as it happens to be the swing high of Aug-Sept 2022. Immediate support is placed at 388 levels being the confluence 50% retracement of the recent up (358-427). The momentum indicator RSI (relative strength index) is moving near 55 levels, which reaffirms that the positive momentum of the index for the short to medium term is likely to remain," added Das.

Pavitraa Shetty from Tips2trades said, "A global stock market slowdown led by poor growth forecasts for countries across the globe has expectedly dented stocks in the metal space as well including Hindalco. Investors can buy Hindalco only if it closes above 416 on the daily charts to sustain and move to 460 in the near term. Strong support can be seen at 380."

Om Mehra, Technical Associate, Choice Broking said, "The stock is constructing a Higher High- Higher Low formation on the daily chart after decent declines from higher levels. Additionally, soccer pattern can be seen simultaneously, indicating that the stock is getting ready for a respectable uptrend. Although 450 levels would represent a significant obstacle in the immediate term, if it is overcome additional upward movement would be expected. The stock is now supported by the 21 and 50 days DMA. We think that volume involvement will also support price action once it maintains 425 levels. Long-term growth outlook for Hindalco seems positive."

Also read: Hero MotoCorp shares tank 2% post Q2 numbers! What should investors do?