As seen in the charts, Aditya Birla Group’s flagship company, Hindalco has a very positive correlation with LME Aluminium prices. An investor both long-term or short-term should check trend of LME aluminium prices going forward before buying Hindalco.
Hindalco is Asia’s largest integrated primary producer of aluminium. Bauxite and power cost are two key components for aluminium producers. Hindalco has an advantage over its peers with captive power plant and smelter production plant situated in Orissa, one of the largest states with bauxite reserves.
Note: Data Period: Jan 2000 to Dec 2011. Monthly Average Prices of LME Aluminium (in USD)and Hindalco