Hindalco is top gainer

Yesterday, it was Eicher Motors which zoomed up after Credit Suisse upgraded its rating on the stock and today, it is Hindalco. The stock is currently the top gainer on the BSE, up 7% at Rs.175 and this is after hitting a 3-year high at Rs.175.90.

The stock has zoomed up after foreign brokerage house CLSA upgraded the stock  to "buy" from a "sell" rating. It has given a target price of Rs.215, saying in the report that the stock has the potential to double  in four years time  once its Indian smelters, Mahan coal mine and Novelis' unit are all ramped up.  It expects Novelis to be one of the biggest beneficiaries from the shift of the automakers from steel aluminium.

The brokerage has also stated that it expects the capex of Hindalco and Novelis to come down significantly in FY16, turning free cash flow positive FY16 onwards. It is looking at consolidated net debt to peak in FY15 and decline at an average by Rs.5800 crore (Rs 28/share) per annum over FY16-19.