Please refer to important disclosures at the end of this report
1
Hindalco Industries Limited (HIL) is industry leader in aluminium and copper. HIL
is metal flagship company of the Aditya Birla Group, the world's largest
aluminium rolling company and one of the biggest producers of primar
y
aluminium in Asia. Its copper smelter is one of the world’s largest custom
smelters at a single location. The management expects that the domestic sale o
f
aluminium may increase in H2, with rising demand post Monsoon which will
help offset cost pressure of rising coal prices. HIL’s cost control, higher domestic
sale of aluminium and stable aluminium prices would boost earnings going
ahead. Management also highlighted that the FCF generated will be used
primarily to pare down debt and targets achieving its leverage target of 4x which
is currently 4.8x on TTM by FY18-end. Novelis a 100% subsidiary of HIL
continues to focus on improving product mix with incrementally highe
r
proportion of auto in overall volume growth, this will helps it in improving
profitability despite lower volume. Novelis mentioned on the results call that all
five auto lines are now fully operational and three of them will achieve 100%
capacity utilisation by the end of FY17. The other two lines are contracted fo
r
80% of their capacity, allowing management to provide strong auto volume
growth guidance. Hence Buy.
BUY
CMP `175
Stock Info
Sector
Beta 1.9
Bloomberg Code
Shareholding Pattern (%)
Promoters 37.7
MF / Banks / Indian Fls 22.4
FII / NRIs / OCBs 32.3
Indian Public / Others 7.7
Abs. (%) 3m 1yr 3yr
Sensex (8.9) 2.9 25.7
Hindalco Inds. 10.5 121.4 45.2
Reuters Code HALC.BO
1
BSE Sensex 26,393
Nifty 8,143
Face Value (`)
Metals
Market Cap (` cr) 36,186
52 Week High / Low 185/59
Avg. Daily Volume 1,417,168
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
Hindalco Industries
Others | Metals
December 7, 2016
Hindalco Industries | Metals
December 07, 2016
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Hindalco Industries
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
(
-5% to -15%
)
Sell
(
< -15