Hindalco - Upgrade backed by improving confidence in project execution, volume growth - Deutsche Bank

We are upgrading our recommendation on Hindalco to Buy, premised on (i) increased confidence in commissioning timeline of long delayed Utkal alumina and Mahan aluminum projects in 1Q'FY14, (ii) 35% /31%CAGR volume growth in legacy, low cost domestic alumina/aluminum businesses over FY13-15 after ~7 years of flat volumes, (iii) synchronization of Utkal alumina refinery commissioning with emerging tightness in global alumina supply, (iv) 60% underperformance relative to sensex over the past two years, and (v) attractive valuations (trading at FY14 P/BV of 0.8x - a 3 year low). We roll forward to FY14 with revised target price of INR150/share (vs 120 earlier).

Source : Equity Bulls

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