Fund managers turn bullish on Hindalco

Turnaround at US-based arm Novelis, stability in prices and a good demand scenario are the reasons

Aditya Birla Group’s Hindalco Industries has caught the fancy of domestic equity fund managers. Last month, they bought shares worth Rs 1,940 crore of the aluminium major, more than doubling their holdings.

A turnaround at US-based arm Novelis, stability in prices and a good demand scenario are factors behind the bullishness. Two years earlier, primary aluminium prices had fallen to below the benchmark cost of production of $1,500 a tonne, due to oversupply. This prompted a shift in strategy at Hindalco to more of value-added products.

Meanwhile, the decline in aluminium’s price forced many other leading global producers to cut