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In this last part of article series let us discuss about the Aditya Birla group. The group manages the following companies in India.
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Grasim Industries (Viscose staple fibre, grey cement, white cement, sponge iron, chemicals and textiles)
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Hindalco Industries (Alumnium and copper)
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Aditya Birla Nuvo (Carbon black, chemicals, fertilizers, textiles, garments and viscose filament yarn)
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UltraTech Cement
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PSI Data Systems
In addition, the group has presence in other countries too. It manages 6 companies in Thailand, 4 in Philippines, 5 in Indonesia, 3 in China, 2 each in Egypt and Canada, one each in Australia and Laos.
The group has a market capitalization of USD 31.5 billion and a combined workforce of 100,000 in 25 countries. It was adjudged "The Best Employer in India and among the top 20 in Asia" by the Hewitt-Economic Times and Wall Street Journal Study 2007.
Summary:
| Scrip/NSE Ticker | BSE Group | Scrip Code | Price 16-Nov |
| A | 500300 | 3837.00 | |
| Hindalco Industries (HINDALCO) | A | 500440 | 203.75 |
| Aditya Birla Nuvo (ABIRLANUVO) | A | 500303 | 1562.00 |
| UltraTech Cement (ULTRACEMCO) | B1 | 532538 | 1004.00 |
| Idea Cellular (IDEA) | A | 532822 | 127.00 |
| Bihar Caustic & Chemicals (BCCL) | B1 | 500057 | 81.25 |
The following table shows the key financial ratios:
| Scrip | P/E | P/BV | Gain since 01-Jan |
| GRASIM | 20.19 | 5.65 | 38.14 |
| HINDALCO | 9.29 | 1.90 | 17.97 |
| ABIRLANUVO | 74.44 | 4.66 | 26.80 |
| ULTRACEMCO | 15.55 | 7.09 | (5.52) |
| IDEA 1 | 75.45 | 29.81 | 69.33 |
| BCCL | 5.93 | 1.29 | 85.45 |
1 Idea Cellular was listed on March 9, 2007 and the gain has been computed based on IPO price of Rs.75.
Grasim:
During July 2007, an “ascending triangle breakout” (bullish continuation pattern) occurred in the medium term chart of Grasim. The technical target of 3948 was achieved when the stock hit a high of 4051 a couple of weeks ago. As such, there are no reversal signs yet. Hence it can be concluded that the bull run should continue. The next target for the stock works out to 4602. However, the declining volumes during the uptrend is a concern.
Hindalco:
The stock had fallen by about 52% between May 2006 and May 2007 as can be seen above. The resistance at 192.70 could not be broken during the uptrend that started in May. However, it has now successfully closed above it for two weeks in a row. The stock has already touched a high of 240 which is 100% retracement from the low of 120. It is likely to test the previous high at 251.30 when the uptrend continues. National Aluminium Company (NALCO) has gained 88.47% this year compared to Hindalco’s 17.97%.
Aditya Birla Nuvo:
We had already discussed about this stock in my previous article, “Which of India’s Top 10 “Family Named” Stocks is Most Valuable? – Part 1”.
I had mentioned that the stock is bullish for the medium term. It is on a corrective decline now and it should find support at around 1400 levels. The support trendline is intact and we need to wait for a confirmation for a trend reversal. The next target for the stock works out to 2000.
UltraTech Cement:
This stock has so far not yet closed above its resistance at 1250 in medium term chart. However, the support trendline has not been broken. There are no reversal signs yet. In the absence of such confirmations, it may be concluded that the bullish trend will continue. The projected technical target for the current upmove is 1324.
Idea Cellular:
Like UltraTech, this stock is also bullish and it is on a decline. Suport exists at around 117. Once again, let us wait for a technical confirmation for a trend reversal.
Bihar Caustic & Chemicals:
This stock too, is bullish. It broke the previous resistance at 65.50 three weeks ago with good volumes. We can see a bullish “triple bottom” formation. This is a highly bullish sign and the stock is expected to reach a target of 121.50 in the medium term.
Conclusion:
All the six stocks belonging to Aditya Birla group are bullish in the medium term charts.
Grand Finale: The India Street verdict
| Parameter | MP Birla | GP – CK Birla |
| Stocks | 4 | 2 |
| Bullish stocks | 1 | 2 |
| Price appreciation above 20% since January 1 | 1 | 2 |
| Growth stocks (High P/E) | 1 | 1 |
| Parameter | KK Birla | Aditya Birla |
| Stocks | 6 | 6 |
| Bullish stocks | 4 | 6 |
| Price appreciation above 20% since January 1 | 4 | 4 |
| Growth stocks (High P/E) | 1 | 2 |
The GP – CK Birla group is the smallest as far as number of listed companies are concerned. Only one stock from MP Birla group is bullish. KK Birla and Aditya Birla groups have six listed stocks each and technically, all the Aditya Birla group stocks are bullish compared to 4 of KK Birla group; two of its companies (Aditya Birla Nuvo and Idea Cellular) are ‘growth’ stocks compared to Texmaco of KK Birla group.
Kumar Mangalam Birla
Therefore, we can conclude that the Aditya Birla group companies are more valuable in Indian stock market.
Sundaramurthy Vadivelu
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