Hot Chips - Hindalco Industries

Hindalco Industries, is an industry leader in aluminium and copper. In the last one month, the counter has appreciated by over 18 per cent and has outperformed the BSE Metal Index which at the same time moved up by almost 10 per cent. However, the counter is still trading below its fair value, considering its P/BV of 0.94 times. As per a contrarian fund manager, the metal sector can be considered a good bet on account of the inflation that is expected to move up sharply in CY10. Looking at the charts, a technical analyst has given a buy call on the counter with a target of Rs 140 with a stop loss of Rs 112. The counter has witnessed a huge increase in the open interest in the futures and option segment and at the same time there has been a sharp rise in the volumes as well as the price. Thus, bearing in mind that the metal sector can be considered as a contrarian bet, investors with medium to long-term investment perspective can take exposure in the counter.