THIS Aditya Birla Group stock rises 3% after JP Morgan gives ‘overweight’ rating

Aditya Birla Group's stock Hindalco jumped over 3 per cent on Wednesday after brokerage firm JP Morgan assigned ‘overweight’ rating, setting a target price of ₹670 per share, indicating a potential 9.5% increase from Tuesday's closing price.

The brokerage firm JP noted that Hindalco's stock price could face fluctuations in the coming weeks. However, investors are closely monitoring key factors like scrap spreads and aluminium prices on the London Metal Exchange (LME) to assess the company's performance.

The brokerage indicated that Hindalco's stock price may experience volatility in the weeks ahead. However, investors are keeping a close watch on crucial factors such as scrap spreads and aluminium prices on the London Metal Exchange (LME) to evaluate the company's performance.

However, JP Morgan also highlighted potential risks, including rising scrap prices and persistent tariff uncertainties. These challenges could impact volume growth and drive a shift towards alternative materials like PET plastics, potentially reducing the demand for aluminum.

Despite these challenges, JPMorgan remains optimistic about Hindalco, highlighting the potential for significant gains if macroeconomic conditions, especially aluminium prices, turn favorable for the company. In the short term, the stock's volatility will be influenced by external factors such as scrap prices and global trade trends, making it one to closely monitor for investors.

Ban on imports of Russian primary aluminum

Another reason behind the Hindalco stock price surge is that European Union diplomats reached an agreement on the sixteenth round of sanctions targeting Russia.

The sanctions involve a ban on imports of Russian primary aluminum and the addition of 73 new shadow fleet vessels to the list. These measures have been implemented just days before the third anniversary of the Russia-Ukraine conflict.

Hindalco share price has plunged nearly 5 per cent in the last six months, however, has gained 22.57 per cent in one year on NSE.