2QFY2012 Result Update | Base Metals

November 11, 2011

Hindalco
Performance highlights

BUY
CMP Target Price
Novelis (US $mn) yoy % 7.2 (4.2) (128)bp 15.8 2QFY12 2,880 228 7.9 120 2QFY11 2,524 230 62 yoy % 14.1 (0.9) 93.5

`129 `151
12 months

Standalone (` cr) Particulars Net sales EBITDA* % margin Net profit 2QFY12 6,220 669 10.8 503 2QFY11 5,803 698 12.0 434

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code

9.1 (120)bp

Base Metals 24,681 1.4 252/120 1005418 1 17,193 5,169 HALC.BO HNDL@IN

Source: Company, Angel Research; Note: *Adjusted EBITDA for Novelis

For 2QFY2012, Hindalcos 2QFY2012 standalone profit was below our expectations. However, Novelis reported a robust set of numbers during 2QFY2012. We maintain our Buy rating on the stock. Higher power costs dent standalone EBITDA margin: Hindalcos standalone net sales increased by 7.2% yoy to `6,220cr mainly due to higher realization. However, EBITDA decreased by 4.2% yoy to `669cr on account of rising power costs, driven by increased coal prices. Thus, EBITDA margin slipped by 128bp yoy to 10.8% in 2QFY2012. Other income grew by 114.5% yoy to `176cr. Tax rate stood at 16.8% in 2QFY2012 compared to 22.0% in 2QFY2011. Consequently, net profit increased by 15.8% yoy to `503cr. Robust performance by Novelis continues: Novelis net sales grew by 14.1% yoy to US$2,880mn, driven by higher realization. Shipments of rolled products decreased by 2.3% yoy to 720kt. However, EBITDA decreased modestly by 0.9% yoy to US$228mn on account of increased cost of goods sold, which grew by 16.5% yoy to US$2,549mn. The companys tax expense stood at US$(7)mn in 2QFY2012 compared to US$56mn in 2QFY2011. Consequently, net profit grew by 93.5% yoy to US$120mn during the quarter. Outlook and valuation: At the CMP, the stock is trading at 5.1x FY2012E and 4.8x FY2013E EV/EBITDA. We believe Hindalco is well placed to benefit from a) its aluminium expansion plans (capacity increasing by nearly three folds in the next four years), b) low production cost at its new capacities and c) steady capacity expansion at Novelis. We maintain our Buy recommendation on the stock with an SOTP target price of `151.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 32.1 14.1 28.2 25.6

Abs. (%) Sensex Hindalco

3m 0.8

1yr (16.5)

3yr 74.7

(18.1) (45.0) 114.5

Key financials (Consolidated)

Y/E March (` cr) Net sales % chg Net profit % chg EPS (`) EBITDA margin (%) P/E (x) P/BV (x) RoE (%) RoCE (%) EV/Sales (x) EV/EBITDA (x)
Source: Company, Angel Research

FY2010
60,563 (7.4) 3,925 708.9 20.4 16.1 6.3 1.1 20.9 14.0 0.6 3.6

FY2011
71,801 18.6 2,456 (37.4) 12.8 11.1 10.0 0.8 9.7 9.2 0.5 4.9

FY2012E
76,052 5.9 3,349 36.3 17.5 10.3 7.4 0.8 11.0 7.6 0.5 5.1

FY2013E
78,842 3.7 3,842 14.7 20.1 11.3 6.4 0.7 11.3 7.9 0.5 4.8

Bhavesh Chauhan
Tel: 022- 3935 7800 Ext: 6821 bhaveshu.chauhan@angelbroking.com

Please refer to important disclosures at the end of this report

Hindalco | 2QFY2012 Result Update

Exhibit 1: 2QFY2012 performance (Standalone)

(` cr) Net sales Raw material % of net sales Power and fuel % of net sales Staff cost % of net sales Other expenses % of net sales Total expenditure % of net sales Operating Income EBITDA % of net sales Interest Depreciation Other income Exceptional Items PBT % of net sales Provision for tax % of PBT PAT
Source: Company, Angel Research

2QFY12 6,220 4,103 66.0 753 12.1 292 4.7 455 7.3 5,603 90.1 51 669 10.8 68 174 176 604 9.7 101 16.8 503

2QFY11 5,803 3,873 66.7 574 9.9 284 4.9 430 7.4 5,162 89.0 57 698 12.0 53 172 82 556 9.6 122 22.0 434

yoy % 7.2 5.9 31.1 2.6 5.8 8.5 58.3 (4.2) 28.3 1.4 114.5 8.6 (17.2) 15.8

1QFY12 5,979 3,825 64.0 635 10.6 250 4.2 453 7.6 5,163 86.4 52 868 14.5 67 175 178 803 13.4 159 19.8 644

qoq % 4.0 7.3 18.5 16.6 0.5 8.5 (0.8) (22.9) 1.2 (0.7) (1.0) (24.9) (36.3) (22.0)

Exhibit 2: Standalone 2QFY2012 Actual vs. Angel estimates

(` cr) Net sales EBITDA EBITDA margin (%) Adj. net income
Source: Company, Angel Research

Actual 6,220 669 10.8 503

Estimate 6,039 755 12.5 596

Variation (%) 3.0 (11.3) (174)bp (15.7)

November 11, 2011

Hindalco | 2QFY2012 Result Update

Hindalco (Standalone) Key result highlights

Hindalcos standalone net sales increased by 7.2% yoy to `6,220cr (above our estimate of `6,039cr) mainly due to higher realization. However, EBITDA decreased by 4.2% yoy to `669cr on account of rising power costs, driven by higher coal prices. Power costs grew by 31.1% yoy to `753cr. Thus, EBITDA margin slipped by 128bp yoy to 10.8% in 2QFY2012. Other income grew by 114.5% yoy to `176cr. Tax rate stood at 16.8% in 2QFY2012 compared to 22.0% in 2QFY2011. Consequently, net profit increased by 15.8% yoy to `503cr (below our estimate of `596cr). Hindalco has delayed its completion timeline for Mahan Aluminium smelter to early CY2012 (previously guided at CY2011-end).

Segmental performance
Production of CC rods fell by 21.5% yoy and increased by 0.8% qoq to 34kt, while cathode production declined by 20.7% yoy and increased by 1.9% qoq to 75kt due to the planned shutdown.

Exhibit 3: Copper Quarterly production trend

(tonnes) Copper cathodes CC rods* 2QFY11 3QFY11 4QFY11 94,104 80,224 84,961 43,274 26,996 33,088 1QFY12 73,192 33,701 2QFY12 74,588 33,972 yoy % (20.7) (21.5) qoq % 1.9 0.8

Source: Company, Angel Research; Note: *Own production

During the quarter, aluminium metal production increased by 16.2% yoy. Whereas, production of extrusions declined by 25.8% yoy to 7kt on account of sluggish demand.

Exhibit 4: Aluminium Quarterly production trend

(tonnes) Alumina Aluminium metal Wire rods FRP/foil Extrusions 2QFY11 347,071 123,325 24,158 54,042 9,637 3QFY11 320,310 135,829 23,672 46,188 9,292 4QFY11 344,077 138,720 23,152 48,218 7,319 1QFY12 334,587 140,387 23,403 49,544 7,321 2QFY12 332,383 143,315 24,442 52,439 7,154 yoy % qoq % (4.2) 16.2 1.2 (3.0) (25.8) (0.7) 2.1 4.4 5.8 (2.3)

Source: Company, Angel Research

November 11, 2011

Hindalco | 2QFY2012 Result Update

Exhibit 5: Segmental performance

(` cr) Aluminium Copper Gross revenue Less: Inter-seg. revenue Net sales Aluminium Copper EBIT EBIT margin (%) Aluminium Copper
Source: Company, Angel Research

2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 yoy % qoq % 1,911 3,951 5,861 (1) 5,860 424 129 553 22.2 3.3 1,977 4,000 5,977 (2) 5,975 465 143 608 23.5 3.6 2,211 4,637 6,848 (2) 6,846 562 206 768 25.4 4.4 2,093 3,940 6,033 (2) 6,031 599 145 744 28.6 3.7 2,213 4,062 6,275 6,272 429 148 576 19.4 3.6 15.8 2.8 7.1 7.0 14.5 5.7 3.1 4.0 27.0 4.0 1.7

(3) 121.8

1.2 (28.4) 4.3 (22.5) -

The aluminium divisions EBIT margin stood at 19.4% in 2QFY2012 compared to 22.2% in 2QFY2011. The copper divisions EBIT margin stood at 3.6% in 2QFY2012 compared to 3.3% in 2QFY2011, mainly due to higher treatment and refining charges.

November 11, 2011

Hindalco | 2QFY2012 Result Update

Exhibit 6: Novelis 2QFY2012 performance

(US $mn) Net revenue Cost of goods sold (% of net sales) Gross profit (% of net sales) SG&A expenses (% of net sales) R&D expenses (% of net sales) EBITDA EBITDA margin (%) Restructuring charges Depreciation EBIT (% of net sales) Other income/(Expense) Net Interest expense Unreal. gain/(loss) on derivative Exceptional items PBT (% of net sales) Taxes (% of PBT) PAT (% of net sales) Less: Profit from associates Less: Minority interest Net income
Source: Company, Angel Research

2QFY12 2,880 2,549 88.5 331 11.5 91 3.2 12 0.4 228 7.9 11 81 136 4.7 4 14 126 4.4 (7) (5.6) 133 4.6 3 10 120

2QFY11 2,524 2,188 86.7 336 13.3 97 3.8 9 0.4 230 9.1 9 104 117 4.6 18 37 34 132 5.2 56 42.4 76 3.0 3 11 62

% yoy 14.1 16.5 (1.5) (6.2) 33.3 (0.9) 22.2 (22.1) 16.2 (77.8) (62.2)

1QFY12 3,113 2,708 87.0 405 13.0 95 3.1 12 0.4 298 9.6 19 89 190 6.1 21 73 -

% qoq (7.5) (5.9) (18.3) (4.2) 0.0 (23.5) (42.1) (9.0) (28.4)

(80.8)

(4.5) (112.5) 75.0 (9.1) 93.5

138 4.4 59 42.8 79 2.5 2 15 62

(8.7) (111.9) 68.4 50.0 (33.3) 93.5

November 11, 2011

Hindalco | 2QFY2012 Result Update

Hindalco (Novelis) Key result highlights

Novelis net sales grew by 14.1% yoy to US$2,880mn, driven by increased realization. Shipments of rolled products decreased by 2.3% yoy to 720kt (excluding ingots). On a yoy basis, North America, South America and Asias volumes decreased by 4.0%, 3.0% and 2.0% yoy, respectively.

Exhibit 7: Shipment of rolled products

(kt) Total sales North America Europe Asia South America 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 737 285 227 134 91 715 262 208 148 97 771 280 240 152 99 767 288 237 152 90 720 274 227 131 88 yoy % (2.3) (4.0) 0.0 (2.0) (3.0) qoq % (6.1) (5.0) (4.2) (13.6) (1.9)

Source: Company, Angel Research

However, EBITDA decreased modestly by 0.9% yoy to US$228mn on account of increased cost of goods sold, which grew by 16.5% yoy to US$2,549mn. The companys tax expense stood at US$(7)mn compared to US$56mn in 2QFY2011. Consequently, net profit grew by 93.5% yoy to US$120mn.

Exhibit 8: Novelis EBITDA margin trend

350 300 250 200 150 100 50 0 14 12 10 8 6 4 2 0

Exhibit 9: Novelis Net profit trend

140 120 100 4 2 0
3QFY10 4QFY10 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 2QFY12 (%)

(US $ mn)

(%)

80
(US $ mn)

60 40 20 0 (20) (40) (60)

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

2QFY12

(2) (4)

Adj. EBITDA (LHS)

Adj. EBITDA margin (RHS)

Net profit (LHS)

Net profit margin (RHS)

Source: Company, Angel Research

Source: Company, Angel Research

Exhibit 10: Novelis Adj. EBITDA/tonne trend

350 300 250 400 350 250 200 150 100 50 0 300

200 150 100 50 0

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

Adj. EBITDA
Source: Company, Angel Research

Adj. EBITDA/tonne (RHS)

November 11, 2011

2QFY12

(US $/tonne)

(US $mn)

Hindalco | 2QFY2012 Result Update

Investment rationale
Aluminium capacity to increase three folds in the next four years
Hindalco aims to increase its aluminium capacity by almost three folds in the next four years. Part of the Phase-1 at Hirakud has been completed, wherein the capacity will increase to 161ktpa. Further, in Phase-2, capacity will increase to 213ktpa. Moreover, capacities at Utkal Alumina and Aditya Aluminium are expected to come on stream by 2HCY2012 and early 2013, respectively. Consequently, we expect production and sales volume to record significant growth over FY201014. Most of these new capacities will be backed by captive bauxite and coal mines and, hence, will have lower cost compared to non-integrated players.

Exhibit 11: Expansion projects details

Project Mahan Aluminium, MP Utkal Alumina, Orissa Aditya Aluminium, Orissa Aditya Refinery, Orissa Jharkhand Aluminium Hirakud Canstock Plant Progress Project finance complete; forest clearance for coal block awaited, but applied for tapering linkage Project finance complete Forest stage-II clearance received; Site activities at advanced stage Majority land acquired; construction power line energized Land acquisition started; Water allocated by State government Progressing well Expected completion Early 2012 2H CY 2012 Early 2013 2014 2015 Early 2012

Source: Company, Angel Research

Exhibit 12: Smelting capacity to scale up gradually

1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 Renukhoot Hirakood Mahan Aditya Jharkhand Total 390 213 359 359 1680 359

Exhibit 13: Refining capacity to grow 3.0x

5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Existing Utkal Aditya Total 1500 1500 3000 4500

(ktpa)

Source: Company, Angel Research

Source: Company, Angel Research

Novelis to expand its capacity

Novelis has plans to increase its capacity by ~20% by FY2014E. Capacity at its Pinda operations in Brazil is being increased by ~220kt by CY2012, while the balance will be through debottlenecking (a 3-4% increase in capacity every year). Further, Novelis plans to invest US$400mn to expand its South Korean aluminum rolling and recycling operations by 1mtpa. We expect steady EBITDA of ~US$1bn per year from Novelis, given its stable conversion business.

November 11, 2011

(ktpa)

Hindalco | 2QFY2012 Result Update

Exhibit 14: Novelis to generate US$1bn annually

1,100 1,050 14 12 10

(US $ mn)

1,000 950 900 850 FY10 FY11 EBITDA FY12E EBITDA margin FY13E

6 4 2 0

Source: Company, Angel Research

Outlook and valuation

At the CMP, the stock is trading at 5.1x FY2012E and 4.8x FY2013E EV/EBITDA. We believe Hindalco is well placed to benefit from a) its aluminium expansion plans (capacity increasing by nearly three folds in the next four years), b) low production cost at its new capacities and c) steady capacity expansion at Novelis. We maintain our Buy recommendation on the stock with an SOTP target price of `151.

Exhibit 15: SOTP valuation

FY2013 EBITDA (` cr) Hindalco (Standalone) Novelis Total EV Less: Net debt (FY13E) Value of investments @25% discount Value per share
Source: Angel Research

Multiple 5.0 5.0

EV (` cr) 20,606 23,946 44,553 17,821 2,224 151

4,121 4,789

We have lowered our alumina production and sales volume estimates for FY2013 as the company has delayed its Mahan smelter. Further, we have lowered our aluminium and alumina price estimates for FY2012 and FY2013.

Exhibit 16: Key assumptions

Earlier FY12E Sales volume (tonnes) Aluminium Copper Alumina Novelis LME prices (US $/tonne) Aluminium Copper Alumina
Source: Company, Angel Research

Revised FY13E FY12E 5,59,878 3,60,734 1,27,900 30,97,000 2,275 8,000 335 FY12E 6,53,971 3,60,179 4,24,500 32,20,880 2,325 8,000 355

559,878 360,734 127,900 3,097,000 2,300 9,200 350

653,971 360,179 574,500 3,220,880 2,350 8,500 375

November 11, 2011

(%)

Hindalco | 2QFY2012 Result Update

Exhibit 17: EPS - Angel forecast vs. consensus

Year (`) FY12E FY13E
Source: Bloomberg, Angel Research

Angel forecast
17.5 20.1

Bloomberg consensus
16.8 17.9

Variation (%)
4.2 12.1

Exhibit 18: EV/EBITDA band

160,000 140,000 120,000 100,000

(`cr)

80,000 60,000 40,000 20,000 0 Apr-06 Mar-07

2x

Feb-08
5x

Jan-09
8x

Dec-09
11x 14x

Nov-10

Oct-11

Source: Bloomberg, Angel Research

Exhibit 19: P/E band

1,000 900 800 700 600 500 400 300 200 100 0 Apr-06 Mar-07 Feb-08
5x 15x

(`)

Jan-09
25x

Dec-09
35x

Nov-10

Oct-11

Source: Bloomberg, Angel Research

November 11, 2011

Hindalco | 2QFY2012 Result Update

Exhibit 20: P/BV band

350 300 250

(`)

200 150 100 50 0 Apr-06 Mar-07 Feb-08

0.2x

Jan-09
0.7x

Dec-09
1.2x

Nov-10
1.7x

Oct-11

Source: Bloomberg, Angel Research

Exhibit 21: Recommendation summary

Companies CMP (`) Target price (`) Reco. Mcap (` cr) Upside (%) P/E (x) FY11E FY12E P/BV (x) FY11E FY12E EV/EBITDA (x) FY11E FY12E RoE (%) FY11E FY12E RoCE (%) FY11E FY12E

Hindalco
Nalco

129 60 117 118

151 154 139

Buy Buy Buy

24,681 15,438 39,460 49,774

18 31 18

7.4 10.1 8.1 8.3

6.4 8.7 6.3 7.8

0.8 1.4 0.9 1.8

0.7 1.3 0.8 1.5

5.1 4.9 3.2 4.7

4.8 4.0 2.3 3.5

11.0 13.7 11.2 23.7

11.3 15.7 12.6 20.9

7.6 13.1 9.6 22.7

7.9 15.1 11.0 20.0

- Neutral

Sterlite Hind. Zinc

Source: Company, Angel Research

November 11, 2011

10

Hindalco | 2QFY2012 Result Update

Profit & Loss Statement (Consolidated)

Y/E March (` cr) Net sales Other operating income Total operating income % chg Total expenditure EBITDA % chg (% of Net sales) Depreciation EBIT % chg (% of Net sales) Interest charges Other income (% of PBT) Share in profit of asso. Recurring PBT % chg Extra. Inc/(Expense) PBT (reported) Tax (% of PBT) PAT (reported) Add: Earnings of asso. Less: Minority interest Extra. Expense/(Inc.) PAT after MI (reported) ADJ. PAT % chg (% of Net sales) Basic EPS (`) Fully Diluted EPS (`) % chg FY2008 FY2009 59,696 317 60,013 210.7 53,378 6,635 49.8 11.1 2,457 4,179 17.2 7.0 1,849 656 22.0 2,985 (18.5) 2,985 362 12.1 2,624 (16) (221) 2,387 2,343 (11.0) 3.9 20.1 19.1 (24.3) 65,415 211 65,625 9.4 62,648 2,977 (55.1) 4.6 3,038 (60) (0.1) 1,232 688 (113.7) (605) (120.3) (605) (954) 349 (35) 172 485 422 (82.0) 0.6 2.8 2.5 (87.0) FY2010 FY2011 60,563 160 60,722 (7.5) 50,976 9,746 227.3 16.1 2,784 6,962 11.5 1,104 323 5.2 6,181 (1,121.7) 6,181 1,829 29.6 4,352 (3) (424) 3,925 3,910 826.2 6.4 22.1 20.4 723.0 71,801 277 72,078 18.7 64,076 8,002 (17.9) 11.1 2,750 5,252 (24.6) 7.3 1,839 431 11.2 3,843 (37.8) 3,843 964 25.1 2,879 (57) (366) 2,456 2,456 (37.2) 3.4 12.8 12.8 (37.2) FY2012E 76,052 233 76,285 5.8 68,461 7,824 (2.2) 10.3 2,834 4,990 (5.0) 6.6 972 792 16.5 4,811 25.2 4,811 1,263 26.3 3,547 -199 3,349 3,349 36.3 4.4 17.5 17.5 36.3 FY2013E 78,842 238 79,080 3.7 70,170 8,911 13.9 11.3 3,152 5,758 15.4 7.3 1,095 856 15.5 5,519 14.7 5,519 1,487 26.9 4,032 -191 3,842 3,842 14.7 4.9 20.1 20.1 14.7

November 11, 2011

11

Hindalco | 2QFY2012 Result Update

Balance Sheet (Consolidated)

Y/E March (` cr) SOURCES OF FUNDS Equity share capital Reserves & surplus Shareholders funds Share warrants Minority interest Total loans Deferred tax liability Total liabilities APPLICATION OF FUNDS Gross block Less: Acc. depreciation Net Block Capital work-in-progress Goodwill Investments Current assets Cash Loans & advances Other Current liabilities Net current assets Mis. exp. not written off Total assets
34,187 7,373 26,814 2,457 8,833 13,892 21,474 1,717 1,859 17,899 17,204 4,271 1.0 56,267 38,332 10,807 27,525 2,949 4,291 10,431 19,271 2,192 1,827 15,252 16,260 3,011 0.4 48,207 41,189 16,622 24,567 5,801 4,433 11,246 23,188 2,195 3,117 17,876 18,017 5,172 51,219 39,265 15,801 23,464 13,131 8,941 10,855 27,985 2,556 3,333 22,095 21,684 6,301 62,692 47,265 18,635 28,630 12,430 8,941 10,855 24,927 5,277 1,521 18,129 16,313 8,614 69,471 57,265 21,788 35,478 11,730 8,941 10,855 26,278 6,016 1,577 18,685 16,547 9,731 76,735 123 17,085 17,208 139 1,617 32,352 4,951 56,267 170 15,684 15,854 1,287 28,310 2,757 48,207 191 21,353 21,545 1,737 23,999 3,938 51,219 191 28,832 29,024 2,217 27,692 3,760 62,692 191 31,912 32,104 2,416 31,192 3,760 69,471 191 35,485 35,677 2,606 34,692 3,760 76,735 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

November 11, 2011

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Hindalco | 2QFY2012 Result Update

Cash flow statement (Consolidated)

Y/E March (` cr) Profit before tax Depreciation Change in working capital Less: Other income Direct taxes paid Cash flow from operations (Inc.)/ Dec. in fixed assets (Inc.)/ Dec. in investments (Inc.)/ Dec. in loans & adv. Other income Cash flow from investing Issue of equity Inc./(Dec.) in loans Dividend paid Others Cash flow from financing Inc./(Dec.) in cash Opening cash bal. Closing cash bal.
FY2008 FY2009 2,985 2,457 758 135 935 5,400 (2,150) (731) (18,072) 2,524 10 2,312 242 1,467 1,709 (605) 3,038 2,931 843 4,581 FY2010 FY2011 FY2012E FY2013E 6,181 2,784 (598) 635 4,932 3,843 2,725 (703) 1,675 1,313 6,226 507 (519 10 3,738 384 2,539 825 361 2,186 2,547 4,811 2,834 407 1,263 6,789 (7,300) (7,300) 3,500 269 3,231 2,721 2,556 5,277 5,519 3,152 (377) 1,487 6,808 (9,300) (9,300) 3,500 269 3,231 739 5,277 6,016

61 (2,798.7)

(16,653) (2,890) (910) 2,928 5,062 353 2,245 778 1,405 2,183

(4,171) (7,717) (348.3) 2,754 (320.9) 327 1,677.1 428 (76) 2,263 2,195

4,907 (1,614.3)

(5,437) (6,691)

12,712.3 (9,195)

12,915 (6,731)

November 11, 2011

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Hindalco | 2QFY2012 Result Update

Key ratios
Y/E March Valuation ratio (x) P/E (on FDEPS) P/CEPS P/BV Dividend yield (%) EV/Sales EV/EBITDA EV/Total assets Per share data (`) EPS (Basic) EPS (fully diluted) Cash EPS DPS Book value DuPont analysis EBIT margin Tax retention ratio (%) Asset turnover (x) RoIC (Post-tax) Cost of debt (post tax) Leverage (x) Operating RoE Returns (%) RoCE (Pre-tax) Angel RoIC (pre-tax) RoE Turnover ratios (x) Asset turnover (gross block) Inventory (days) Receivables (days) Payables (days) WC cycle (days) Solvency ratios (x) Net debt to equity Net debt to EBITDA Interest coverage
1.0 2.5 2.3 1.0 5.3 0.5 1.1 6.3 0.5 1.8 2.9 0.5 1.9 5.1 0.5 2.0 5.3 2.5 76 41 72 33 1.8 50 37 55 36 1.5 81 39 83 36 1.8 50 42 50 37 1.8 50 42 50 41 1.5 50 42 50 41 10.5 16.5 15.6 2.6 14.0 21.6 20.9 9.2 15.4 9.7 7.6 13.0 11.0 7.9 12.9 11.3 7.0 87.9 2.2 13.4 8.0 1.0 18.7 (0.1) 1.7 4.1 1.0 11.5 70.4 1.7 13.4 3.0 0.5 18.5 7.3 74.9 1.7 9.1 5.3 0.5 10.9 6.6 73.7 1.5 7.2 2.4 0.5 9.4 7.3 73.1 1.4 7.5 2.4 0.5 10.0 20.1 19.1 39.1 1.9 140.3 2.8 2.5 20.3 1.4 93.2 22.1 20.4 35.0 1.4 112.6 12.8 12.8 27.2 1.4 151.7 17.5 17.5 32.3 1.4 167.8 20.1 20.1 36.5 1.4 186.4 6.7 3.3 0.9 1.4 0.5 4.9 1.2 51.8 6.3 1.4 1.0 0.6 12.6 1.4 6.3 3.7 1.1 1.0 0.6 3.6 1.4 10.0 4.7 0.8 1.0 0.5 4.9 1.7 7.4 4.0 0.8 1.0 0.5 5.1 1.4 6.4 3.5 0.7 1.0 0.5 4.8 1.2 FY2008 FY2009 FY2010 FY2011 FY2012E FY2013E

November 11, 2011

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Hindalco | 2QFY2012 Result Update

Research Team Tel: 022 - 4040 3800

E-mail: research@angeltrade.com

Website: www.angeltrade.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Hindalco No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.

Ratings (Returns) :

Buy (> 15%) Reduce (-5% to 15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

November 11, 2011

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