Copper and aluminium major Hindalco Industries gained 2.2% to Rs 149.25 on renewed buying.

The scrip was the top gainer from the 30-share Sensex constituents. On BSE, 16.6 lakh shares were traded in the stock.

The Hindalco Industries stock had risen almost 4% to Rs 146.60 on Monday, 4 June 2007, on reports Alcan Inc could team up with Sterlite Industries to bid for Hindalco as a way of making Alcan less of a takeover target. Huge volume of 61.4 lakh shares had accompanied the surge in the counter on that day. The scrip had eased a bit to Rs 146 the next day.

The markets had hammered the Hindalco scrip from early February 2007 to early March 2007 after the company announced its $6-billion acquisition of Canadian sheetmaker Novelis in early February 2007.

From Rs 173.25 on 9 February 2007, the stock had plunged to a low of Rs 126.90 by 7 March 2007. A gradual recovery took the stock to Rs 149.50 on 25 April 2007. The stock had drifted later to hit a low of Rs 140.55 on 30 May 2007. The stock moved in a narrow range of between Rs 140.85 to Rs 141 in the two trading sessions between 31 May 2007 and 1 June 2007.

Alcan received a $28-billion hostile bid from Alcoa Inc. last month in a deal that could create the world's largest aluminium producer.

However, analysts feel that state-run insurance companies, which own almost 11% stake, may back promoters if Hindalco becomes a takeover target. LIC holds 7.4% stake in Hindalco. The promoter A V Birla group has a 27% stake.

Interestingly, there were also reports last week that Hindalco and Sterlite Industries’ parent Vedanta Resources were in talks with global firms to separately bid for Alcan.

Meanwhile, Alcan said on Tuesday, 5 June 2007, it has acquired 76% in unlisted Alukbond India, an aluminium composite panel-maker for less than $50 million.

At the time of announcing its Q4 March 2007 results on 4 May 2007, Hindalco said it expects strong metal prices to continue. Its net profit rose 15% to Rs 721.30 crore in Q4 March 2007. Sales jumped 30% to Rs 4748.90 crore.

Net profit surged 55% to Rs 2564.30 crore in the year ended 31 March 2007. Sales soared 61% to Rs 18313 crore in FY 2007.

Hindalco completed the Novelis takeover in May 2007, paying $3.5-billion in cash for stock and assuming debt of $2.4 billion.

Hindalco’s current price of Rs 149.25 discounts its FY 2007 EPS of Rs 25 by a PE multiple of 5.97.