Risk-reward, Aleris' acquisition turning favourable for Hindalco Industries

Apart from strong performance by Aleris and a tight auto sheet market in US, analysts say aluminium prices are also bottoming

Hindalco

Shares of Hindalco have rebounded about 8 per cent from its lows in mid-February this year. A strong December quarter performance reported recently by Aleris and an equally healthy future outlook indicates the acquisition of Aleris will be value-accretive for Hindalco. 

Hindalco had announced the acquisition of Aleris in July last year, and completion of the same is expected soon. Further, the acquisition also reduces some concerns on the performance of Hindalco’s international business. Moreover, the worries over volatility in base metal prices, rising imports in the country,