Bullish on Hindalco: Avinash Gorakshekar, Anagram Capital Ltd

Avinash Gorakshekar, Head of Research, Anagram Capital Ltd, in a chat with ET Now talks about Hindalco.

Do you believe that the escalating commodity prices have of hit Hindalco pretty hard because it means that higher costs means larger debt for the company? Do you believe that this will dent their balance sheets do you continue to be bullish?

Actually we are bullish primarily because we feel that aluminium prices, which are firm as of now, are likely to continue considering the fact that globally automotive has been one of the major consumers for aluminium and there has been a very strong uptick on the automobile demand front.

More importantly, aluminium premiums - typically in the Japanese markets - have actually shot up primarily because production levels in the industry are now at a pretty low level roughly about 2.18 million tonnes. Our sense is that Novelis is also turning the corner. In fact on a consolidated basis, we feel that Hindalco should show pretty strong numbers for 011 and 012. Therefore, we are pretty confident of a 16-17% upside from the current level with a target price of 190.