1QFY2012 Result Update | Base Metals

August 17, 2011

Hindalco
Performance highlights

BUY
CMP Target Price
yoy % 16.2 4.2 (167)bp 20.6 Novelis (US $mn) 1QFY12 1QFY11 yoy % 3,113 2,533 22.9 298 9.6 62 235 9.3 50 26.8 30bp 24.0

`143 `196
12 months

Particulars Net sales EBITDA* % margin Net profit

Standalone (` cr) 1QFY12 1QFY11 5,979 5,146 868 14.5 644 832 16.2 534

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

Base Metals 27,386 1.4 252/141 974870 1 16,841 5,057 HALC.BO HNDL@IN

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

For 1QFY2012, Hindalco reported robust set of numbers for its standalone operations as well as for Novelis. However, the company reported delays in its Utkal and Aditya projects. Nevertheless, we expect robust growth in profits during FY2012 and FY2013. We maintain our Buy view on the stock. Higher costs mute standalone EBITDA growth: Hindalcos standalone net revenue grew by 16.2% yoy to `5,979cr due to higher realisation despite a decline in sales volume. However, EBITDA grew only by 4.2% yoy to `868cr. EBITDA margin dipped by 167bp yoy to 14.5% due to higher raw-material and energy costs. Interest expense grew by 12.5% yoy to `67cr, while other income grew by 158.1% yoy to `178cr. Consequently, net profit grew by 20.6% yoy to `644cr. Robust performance by Novelis continues: Novelis top line grew by 22.9% yoy to US$3,113mn on the back of higher realisation. Shipments decreased by 1.5% yoy to 767kt (excluding ingots). Adjusted EBITDA grew by 26.8% yoy to US$298mn on the back of improved product mix. EBITDA/tonne increased by 10.3% yoy to US$374. Net income grew by 24.0% yoy to US$62mn. Outlook and valuation: At the CMP, the stock is trading at 5.6x FY2012E and 5.2x 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 `196.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 32.1 12.8 30.8 24.3

Abs. (%) Sensex Hindalco

3m (7.1)

1yr (6.7)

3yr 14.4 16.6

(25.7) (14.6)

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 7.0 1.3 20.9 14.0 0.7

FY2011E
71,801 18.6 2,456 (37.4) 12.8 11.1 11.1 1.1 10.9 9.9 0.7

FY2012E
74,701 4.0 3,996 62.7 20.9 11.6 6.8 1.0 15.6 10.0 0.6

FY2013E
78,657 5.3 4,436 11.0 23.2 12.4 6.2 0.9 15.0 10.0 0.6

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

4.6

6.0

5.6

5.2

Please refer to important disclosures at the end of this report

Hindalco | 1QFY2012 Result Update

Exhibit 1: 1QFY2012 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 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 1QFY11 5,146 3,121 60.7 510 9.9 228 4.4 487 9.5 4,346 84.5 33 832 16.2 59 169 69 673 13.1 139 20.6 534 20.6 14.7 19.4 12.5 3.7 158.1 58.3 4.2 18.8 (7.0) 9.7 24.6 yoy % 16.2 22.6 FY11 22,845 14,809 64.8 2,270 9.9 1,014 4.4 1,813 7.9 19,905 87.1 199 3,138 13.7 230 687 390 2,611 11.4 538 20.6 2,073 FY10 19,195 12,294 64.0 1,964 10.2 883 4.6 1,223 6.4 16,363 85.2 115 2,947 15.4 267 668 251 2,263 11.8 477 21.1 1,786 16.1 12.7 15.3 (13.7) 2.8 55.1 72.5 6.5 21.6 48.2 14.8 15.6 yoy % 19.0 20.5

Source: Company, Angel Research

August 17, 2011

Hindalco | 1QFY2012 Result Update

Hindalco (Standalone) Key result highlights

Hindalcos standalone net sales grew by 16.2% yoy to `5,979cr due to higher realisation despite lower sales volume. However, EBITDA grew by only 4.2% yoy to `868cr. EBITDA margin dipped by 167bp yoy to 14.5% due to higher raw-material and energy costs. Interest expense grew by 12.5% yoy to `67cr. Other income grew by 158.1% yoy to `178cr. Consequently, net profit grew by 20.6% yoy to `644cr.

Segmental performance
During 1QFY2012, the companys copper division reported revenue of `3,940cr, up 18.9% yoy, but declined by 15.0% qoq. Production of CC rods fell by 17.2% yoy and increased by 1.9% qoq to 33kt. Cathode production declined by 4.1% yoy and 13.9% qoq to 73kt due to planned shutdown.

Exhibit 2: Copper Quarterly production trend

(tonnes) Copper cathodes CC rods* 1QFY11 2QFY11 3QFY11 76,309 94,104 80,224 40,708 43,274 26,996 4QFY11 84,961 33,088 1QFY12 73,192 33,701 yoy % (4.1) (17.2) qoq % (13.9) 1.9

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

The aluminium divisions revenue grew by 12.1% yoy but declined by 5.0% qoq to `2,093cr due to lower sales of downstream products. During the quarter, extrusions production declined by 23.9% yoy to 7kt on account of sluggish demand.

Exhibit 3: Aluminium Quarterly production trend

(tonnes) Alumina Aluminium metal Wire rods FRP/foil Extrusions 1QFY11 341,419 140,061 23,326 51,373 9,617 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 yoy % qoq % (2.0) (2.8) 0.2 0.3 (3.6) (23.9) 1.2 1.1 2.8 0.0

Source: Company, Angel Research

August 17, 2011

Hindalco | 1QFY2012 Result Update

Exhibit 4: Segmental performance

(` cr) Aluminium Copper Gross revenue Less: Inter-seg. revenue Net sales Aluminium Copper EBIT EBIT margin (%) Aluminium Copper 29.6 3.7 22.2 3.3 23.5 3.6 25.4 4.4 28.6 3.7 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 yoy % qoq % 1,867 3,314 5,181 (3) 5,178 552 124 676 1,911 3,951 5,861 (1) 5,860 424 129 553 1,977 4,000 5,977 (2) 5,975 465 143 608 2,211 4,637 6,848 (2) 6,846 562 206 768 2,093 3,940 6,033 6,031 599 145 744 12.1 (5.3) 18.9 (15.0) 16.4 (11.9) 41.7 6.5 (3.1) 16.5 (11.9) 8.5 10.0 16.8 (29.5)

(2) (14.2)

Source: Company, Angel Research

During 1QFY2012, the aluminium divisions EBIT margin stood at 28.6% compared to 29.6% in 1QFY2011; however, on a sequential basis, it increased from 25.4% in 4QFY2011 due to higher aluminium prices. The copper divisions EBIT margin remained flat yoy at 3.7% in 1QFY20112, but it declined from 4.4% in 4QFY2011 mainly due to higher energy cost.

August 17, 2011

Hindalco | 1QFY2012 Result Update

Exhibit 5: Novelis 1QFY2012 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

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 73 138 4.4 59 42.8 79 2.5 2 15 62

1QFY11 2,533 2,208 87.2 325 12.8 81 3.2 9 0.4 235 9.3 6 126 5.0 (7) 36 (6) 77 3.0 15 19.5 62 2.4

% yoy 22.6 24.6 17.3 33.3 26.8 216.7 50.8

FY11

FY10

% yoy 22.1 28.6 (8.8) 7.6 8.3

22.9 10,730 8,786 9,336 7,257 87.0 13.0 367 3.4 39 0.4 9.2 54 396 538 5.0 16 102.8 188 58 (74) 79.2 293.3 27.4 350 3.3 163 46.6 187 1.7 13 46 128 66.7 24.0 82.6 17.4 341 3.9 36 0.4 13.1 13 388 8.5 14 159 186 1,394 1,529

988 1,152 (14.2) 315.4 2.1

103 (13.6)

751 (28.4)

18.2

792 (55.8) 9.0 262 (37.8) 33.1 530 (64.7) 6.0 15 (13.3) 59 (22.0) 456 (71.9)

3 (33.3) 9 50

August 17, 2011

Hindalco | 1QFY2012 Result Update

Hindalco (Novelis) Key result highlights

Novelis top line grew by 22.9% yoy to US$3,113mn on the back of higher realisation. Shipments decreased by 1.5% yoy to 767kt (excluding ingots). On a yoy basis, North America and Asia reported volume growth of 1.8% and 3.4% yoy, respectively.

Exhibit 6: Shipments across geographies higher yoy

(kt) Total sales North America Europe Asia South America 1QFY11 2QFY11 3QFY11 4QFY11 1QFY12 779 283 249 147 100 767 288 244 134 101 751 267 225 148 111 800 283 258 152 107 767 288 237 152 90 yoy % (1.5) 1.8 (4.8) 3.4 (10.0) qoq % (4.1) 1.8 (8.1) 0.0 (15.9)

Source: Company, Angel Research

During the quarter, adjusted EBITDA grew by 26.8% yoy to US$298mn on the back of improved product mix. EBITDA/tonne increased by 10.3% yoy to US$374 in 1QFY2012. Net income grew 24.0% yoy to US$62mn.

Exhibit 7: Novelis EBITDA margin trend

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

Exhibit 8: Novelis Net profit trend

250 200 10 8 6 4 2 0

(US $ mn)

(%)

150

(US $ mn)

100 50 0

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

1QFY12

(50) (100)

1QFY12

(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 9: Novelis Adjusted EBITDA/tonne trend

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

200 150 100 50 0

2QFY10

3QFY10

4QFY10

1QFY11

2QFY11

3QFY11

4QFY11

Adj. EBITDA

Adj. EBITDA/tonne (RHS)

Source: Company, Angel Research

August 17, 2011

1QFY12

(US $/tonne)

(US $mn)

(%)

Hindalco | 1QFY2012 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 10: Details of expansion projects

Project Mahan Aluminium, MP Utkal Alumina, Orissa Aditya Aluminium, Orissa Aditya Refinery, Orissa Jharkhand Aluminium Hirakud Canstock Plant
Source: Company, Angel Research

Progress Project finance complete (contractual debt `7,875cr); forest clearance for coal block awaited, but applied for tapering linkage Project finance complete (contractual debt `4,906cr) Forest stage-II clearance received; Site activities at advanced stage Majority land acquired; water drawl agreement in place Land acquisition started; Coal mine allotted jointly with Tata Power Progressing well

Expected completion End 2011 2H CY 2012 Early 2013 2014 2015 Early 2012

Exhibit 11: 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 12: 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 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 34% 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.

August 17, 2011

(ktpa)

Hindalco | 1QFY2012 Result Update

Exhibit 13: 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 5.6x FY2012E and 5.2x 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 a SOTP target price of `196.

Exhibit 14: 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 7.0 5.0

EV (` cr) 34,935 23,946 58,882 23,523 2,224 196

4,991 4,789

We have lowered our production and sales volume estimates for FY2012 and FY2013 as the company has reported delays in its Utkal and Aditya projects.

Exhibit 15: Key assumptions

Earlier FY11E FY12E Sales volume (tonnes) Aluminium Copper Alumina Novelis LME prices (US $/tonne) Aluminium Copper Alumina
Source: Company, Angel Research

Revised FY11E FY12E 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

601,376 360,179 292,904 3,135,600 2,300 9,200 350

830,828 360,179 1,266,200 3,261,024 2,350 10,100 375

August 17, 2011

(%)

Hindalco | 1QFY2012 Result Update

Exhibit 16: EPS Angel forecast vs. consensus

Year (`) FY11E FY12E Angel forecast
20.9 23.2

Bloomberg consensus
18.8 21.0

Variation (%)
11.1 10.4

Source: Bloomberg, Angel Research

Exhibit 17: EV/EBITDA band

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

(`cr)

80,000 60,000 40,000 20,000 0 Apr-06 Nov-06 Jun-07 Jan-08 Aug-08 Mar-09 Oct-09 May-10 Dec-10 Jul-11
2x 5x 8x 11x 14x

Source: Bloomberg, Angel Research

Exhibit 18: P/E band

1,000 900 800 700 600 500 400 300 200 100 0 Apr-06 Nov-06 Jun-07 Jan-08 Aug-08 Mar-09 Oct-09 May-10 Dec-10 Jul-11
5x 15x 25x 35x

Source: Bloomberg, Angel Research

August 17, 2011

(`)

Hindalco | 1QFY2012 Result Update

Exhibit 19: P/BV band

300 250 200

(`)

150 100 50 0 Apr-06 Nov-06 Jun-07 Jan-08 Aug-08 Mar-09 Oct-09 May-10 Dec-10 Jul-11
0.2x 0.7x 1.2x 1.7x

Source: Bloomberg, Angel Research

Exhibit 20: Recommendation summary

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

Hindalco
Nalco

143 61 134 123

196 205 156

Buy Buy Buy

27,386 15,837 45,151 52,077

38 52 26.9

6.8 11.9 7.4 8.9

6.2 10.5 5.8 8.0

1.0 1.6 0.9 1.9

0.9 1.6 0.8 1.5

5.6 7.1 6.4 4.9

5.2 6.0 4.2 3.6

15.6 13.4 13.7 23.2

15.0 15.5 15.2 21.0

10.0 14.0 9.1 23.3

10.0 16.7 12.0 21.2

- Neutral

Sterlite Hind. Zinc

Source: Company, Angel Research

August 17, 2011

10

Hindalco | 1QFY2012 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 74,701 233 74,934 4.0 66,295 8,639 8.0 11.6 2,777 5,863 11.6 7.8 956 682 12.2 5,588 45.4 5,588 1,400 25.0 4,189 (192) 3,996 3,996 62.7 5.3 20.9 20.9 62.7 FY2013E 78,657 238 78,895 5.3 69,115 9,780 13.2 12.4 3,146 6,634 13.2 8.4 1,092 739 11.8 6,281 12.4 6,281 1,654 26.3 4,627 (191) 4,436 4,436 11.0 5.6 23.2 23.2 11.0

August 17, 2011

11

Hindalco | 1QFY2012 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 43,319 19,372 23,947 10,296 4,433 10,457 20,090 1,198 1,795 17,096 14,239 5,850 54,984 51,319 22,148 29,171 9,595 4,433 10,457 23,291 4,063 1,494 17,734 14,543 8,748 62,403 61,319 25,294 36,025 8,895 4,433 10,457 25,381 5,232 1,573 18,576 14,930 10,451 70,261 123 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 23,541 23,732 1,314 25,999 3,938 54,984 191 27,269 27,460 1,506 29,499 3,938 62,403 191 31,436 31,627 1,697 32,999 3,938 70,261 FY2008 FY2009 FY2010 FY2011E FY2012E FY2013E

August 17, 2011

12

Hindalco | 1QFY2012 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 FY2011E FY2012E FY2013E 6,181 2,784 (598) 635 4,932 (4,171) (348.3) (5,437) 2,754 (320.9) 327 1,677.1 428 (76) 2,263 2,195 3,843 2,750 (1,676) 964 3,954 (6,625) (6,625) 2,000 269 57.1 1,674 (997) 2,195 1,198 5,588 2,777 (33) 1,400 6,932 (7,300) (7,300) 3,500 269 3,231 2,864 1,198 4,063 6,281 3,146 (534) 1,654 7,238 (9,300) (9,300) 3,500 269 3,231 1,170 4,063 5,232

61 (2,798.7)

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

4,907 (1,614.3)

12,712.3 (9,195)

12,915 (6,731)

August 17, 2011

13

Hindalco | 1QFY2012 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
1.2 3.2 2.3 1.4 7.3 0.8 1.8 6.3 0.9 2.6 2.9 0.8 2.5 6.1 0.7 2.4 6.1 2.5 76.0 41.1 72.2 33.5 1.8 49.7 37.2 54.8 36.4 1.5 80.7 39.4 82.5 36.4 1.7 50.0 42.0 50.0 37.0 1.6 50.0 42.0 50.0 41.2 1.4 50.0 42.0 50.0 40.9 10.5 15.1 15.6 2.6 14.0 17.9 20.9 9.9 13.4 10.9 10.0 14.0 15.6 10.0 13.8 15.0 7.0 87.9 2.0 12.3 8.0 1.2 17.7 (0.1) 1.5 4.1 1.4 11.5 70.4 1.4 11.4 3.0 0.8 18.2 7.3 74.9 1.5 8.4 5.5 0.9 10.9 7.8 75.0 1.4 8.5 2.6 0.8 13.1 8.4 73.7 1.4 8.5 2.6 0.7 13.0 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 1.4 124.0 20.9 20.9 35.4 1.4 143.5 23.2 23.2 39.6 1.4 165.3 7.4 3.6 1.0 1.3 0.6 5.8 1.4 57.3 7.0 1.5 0.9 0.7 15.5 1.7 7.0 4.1 1.3 0.9 0.7 4.6 1.8 11.1 5.2 1.1 0.9 0.7 6.0 2.0 6.8 4.0 1.0 0.9 0.6 5.6 1.7 6.2 3.6 0.9 0.9 0.6 5.2 1.4 FY2008 FY2009 FY2010 FY2011E FY2012E FY2013E

August 17, 2011

14

Hindalco | 1QFY2012 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%)

August 17, 2011

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