Two third of the position EXIT is warranted at current levels.
Since the initiation of coverage on HINDALCO on July 20, 2025, with a BUY rating at a then CMP of ₹676 and a price target of ₹1,118 (65% upside), the stock has delivered strong absolute returns of 38% since our entry and materially outperformed the broader market, despite not having fully achieved our stated target. The recent sharp appreciation in the stock price has coincided with heightened profit booking across the equity markets, particularly in cyclical and commodity-linked names, leading to rising volatility and increasing risk of a near-term technical reversal. While HINDALCO’s underlying business fundamentals remain intact—backed by healthy earnings growth, margin resilience, and long-term structural tailwinds in aluminium and copper, the current market environment is increasingly driven by sentiment, liquidity flows, and risk-off positioning rather than fundamentals alone. Given the favourable gains already accrued from our entry levels, the asymmetry in near-term risk– reward, and the elevated probability of consolidation or correction amid broader market profit booking, we believe full profit booking is a prudent strategy at current levels to preserve capital and lock in returns, with opportunities to reenter at more attractive valuations once market stability improves.
Report attached.