8 May 2019
4QFY19 Results Update | Sector: Metals
Hindalco
Buy
BSE SENSEX
37,789
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
S&P CNX
11,359
HNDL IN
2,229
450.5 / 6.5
260 / 183
-4/-25/-23
2144
65.3
CMP: INR201
TP: INR288(+44%)
Healthy volumes and favorable spreads drive perf.
FCF generation remains strong; Reiterate Buy
Novelis delivered another strong quarter. Adj. EBITDA increased 12% QoQ to
USD357m (our estimate: USD319m), as volumes grew 9% QoQ (+8% YoY) to
870kt and EBITDA/t improved (from an already strong base) by 2% QoQ to
USD410/t (our estimate: USD388). Adj. PAT grew 16% QoQ (+27% YoY) to
USD154m.
For FY19, volumes grew 2.7% YoY, adj. EBITDA/t increased to best-ever
USD417, adj. EBITDA rose 12% YoY to INR1.36b and adj. PAT increased ~51%
YoY to USD556m. Net debt declined USD150m YoY to USD3.4b.
The share of beverage cans in volumes increased by ~200bp YoY to 63% in
FY19, at the cost of lower-margin specialty products. The share of auto in
volumes was steady at ~20% due to capacity constraints. Recycled content
in shipments increased by ~200bp to 61% in FY19.
Outlook remains robust for Novelis:
Demand for aluminum in auto remains
favorable in the US. Chinese auto aluminum market is weak but likely to
recover on a positive outlook on EVs. Beverage cans outlook is also turning
optimistic. Management has guided for robust EBITDA/t of more than
USD400 for FY20. Despite doubling of capex to USD700m (upfronting of
project capex) in FY20, FCF is guided to remain significantly positive.
Valuations attractive, maintain Buy:
Hindalco continues benefiting from
Novelis’ strong business and fully integrated smelting operations in India.
We believe it will continue generating FCF. Aleris acquisition is strategic and
value accretive, in our view, and it too will be FCF positive at margin. The
stock trades at attractive valuation of 5.4x EV/EBITDA and 7.5x P/E on FY20E.
We value it at INR288/share based on SOTP, 44% upside. Reiterate
Buy.
4Q
805
2.0
3,066
17.0
319
9.2
10.4
396
60
87
172
(9)
163
54
33.1
112
138
121
1Q
797
1.5
3,097
16.0
332
14.9
10.7
417
63
86
183
7
190
53
27.9
137
36
130
FY19
2Q
3Q
807
800
0.6
0.5
3,136 3,009
12.2
-2.5
355
322
17.5
5.6
11.3
10.7
440
403
66
64
86
88
203
170
(23)
(55)
180
115
64
37
35.6
32.2
116
78
-62
-36
139
133
FY18
4Q
870
8.1
3,084
0.6
357
11.9
11.6
410
65
90
202
(51)
151
48
31.8
103
-8
154
3,188
3.9
11,614
21.1
1,215
12.0
10.5
381
246
354
615
240
855
233
27.3
609
1,253
369
FY19
3,274
2.7
12,326
6.1
1,366
12.4
11.1
417
258
350
758
(122)
636
202
31.8
434
-29
556
vs Est
4QE
(%)
821
6
2.0
2,995
3
-2.3
319
12
-0.1
10.6
388
6
60
8
89
1
170
19
-
170
-11
48
1
28.0
122
9
122
26
Financials & Valuations (INR b)
Y/E Mar
2019
2020E
Net Sales
1,287
1,482
EBITDA
159.7
187.2
PAT
59.6
59.9
EPS (INR)
26.7
26.9
Gr. (%)
41.6
0.5
BV/Sh (INR)
187.2
212.2
RoE (%)
15.1
13.5
RoCE (%)
10.6
10.6
P/E (x)
7.5
7.5
P/BV (x)
1.1
0.9
2021E
1,536
197.2
68.4
30.7
14.2
240.8
13.5
10.6
6.5
0.8
Estimate change
TP change
Rating change
Quarterly Performance (Novelis) – USD m
Y/E March
Sales (000 tons)
Change (YoY %)
Net Sales
Change (YoY %)
EBITDA (adjusted)
Change (YoY %)
As % of Net Sales
EBITDA per ton (USD)
Interest
Depreciation
PBT (before EO item)
Extra-ordinary Income
PBT (after EO item)
Total Tax
% Tax
Reported PAT
Change (YoY %)
Adjusted PAT
1Q
785
4.0
2,669
16.2
289
7.8
10.8
368
62
90
137
7
144
43
29.9
101
321
94
FY18
2Q
3Q
802
796
3.8
6.1
2,794 3,085
18.3
33.4
302
305
11.9
19.6
10.8
9.9
377
383
62
62
91
86
149
157
274
(32)
423
125
116
20
27.4
16.0
307
121
-445
92
83
121
Sanjay Jain – Research Analyst
(SanjayJain@motilaloswal.com@MotilalOswal.com); +91 22 6129 1523
Aniket Mittal – Research Analyst
(Aniket.Mittal@MotilalOswal.com); +91 22 61291572
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
Hindalco
Conference call highlights
Recycled content in FRP shipments has increased to 61% in FY19 v/s 57% in
FY18.
Current annual capacity stands at ~3,400kt.
Beverage cans comprised 63% of product mix in FY19 (v/s FY18: 61%). The share
of specialties in product mix declined to 17% in FY19 v/s 19% in FY18. The share
of autos in product mix was stable at 20%.
Beverage can market
FY19 shipments increased 7% YoY, led by an economic recovery, particularly
in Brazil, and positive trends favoring usage of aluminum given its
lightweight and recyclable characteristics. The outlook remains positive and
would continue to be a key area of growth.
Pricing conditions in the beverage can market now stable to optimistic.
Share of cans in product mix would be more than 61%.
Auto market
FY19 shipments increased 2% YoY. 2H was impacted by lower auto demand
in China.
Demand from auto in the US remains favorable. There is increasing demand
for larger vehicles with higher aluminum content. Expect China to recover as
well with a positive outlook on EV.
Increase in shipments, though, would be muted as it is currently running
near full capacities.
Specialties market
FY19 shipments decreased 11% YoY due to capacity constraints leading to
lower supplies. Demand conditions, though, were favorable.
Will remain selective in specialties market due to capacity constraints.
Project expansion
200kt automotive finishing line in US to begin customer qualification in late
FY20. Capex for the facility is USD300m.
100kt auto finishing expansion in China would commission in FY21. Pit
foundation works have been completed. Capex for the plant is USD180m.
100kt of rolling and 60kt of recycling capacity expansion to commission in
FY21. Capex for the facility is USD180m.
Capex
in FY20 is expected to be at USD700m. Of this, USD200m is related to
maintenance while the remaining 500m is largely for the three upcoming
projects. Capex would peak in FY20.
62
11
-16
319
-10
-9
357
Higher volumes and
favorable scrap market
conditions drove adj.
EBITDA growth.
Exhibit 1: EBITDA bridge (4QFY19) – USD m
Q4FY18
Volume
Price/Mix
Opert. cost
FX
SG&A
Q4FY19
Source: MOFSL, Company
8 May 2019
2
 Motilal Oswal Financial Services
Hindalco
Exhibit 2: Adjusted EBITDA (USD m) was USD357m
292 289 302
255
305
319
332
355
322
357
Exhibit 3: EBITDA/t was USD410/ton
EBITDA/ton (USD)
768 788 779 788 755 773 750 789 785
Shipments (ktpa)
802 796 805 797 807 800
870
214 213
236 238
277 268 270
Source: MOFSL, Company
Source: MOFSL, Company
North America
shipments rose 5% QoQ (+8% YoY) to 294kt. EBITDA rose 26%
QoQ led by favorable conditions with auto and can markets.
Europe
shipments were up 17% QoQ (+2% YoY) to 240kt. EBITDA, too, increased
17% QoQ to USD56m. On an annual basis though, Europe EBITDA was down 8%
YoY largely due to worsening mix given ongoing challenges for one of its auto
customers.
Asia
shipments were up 11% QoQ (+13% YoY) to 196kt. EBITDA though was
down 8% QoQ. Shipments (+1% QoQ) and EBITDA (-1% QoQ) for
South America
were broadly stable on a sequential basis.
Exhibit 5: EBITDA/t rose QoQ in North America
1,000
800
600
400
200
0
North America
Europe
Asia
South America
Asia
South America
Exhibit 4: FRP shipments (kt) rose in North America and Asia
320
260
200
140
80
North America
Europe
Source: MOFSL, Company
Source: MOFSL, Company
Exhibit 6: Aluminum scrap spreads remain favorable
Source: Aleris
8 May 2019
3
 Motilal Oswal Financial Services
Hindalco
Exhibit 7: Capex (USD m)
Source: MOFSL, Company
Exhibit 8: Net debt (USD m)
Source: Company, MOFSL
Aleris
acquisition is expected to be completed in 3QCY2019. Clearances from US, EU
and China related to anti-competition are still remaining. The company is confident
that it will not have to divest any asset to get regulatory approval.
Aleris also reported healthy 1Q numbers with adj. EBITDA at USD85m vs. USD54
in 1QCY18 led by favorable spreads and higher shipments (+6% YoY). Adj.
EBITDA is expected to be higher sequentially.
Share of higher margin Aerospace (+47% YoY) and Automotive (+81% YoY)
products grew during the quarter.
Aerospace volumes will continue to increase as de-stocking with OEMs is now
behind. Automotive shipments from North America are also expected to grow
based on committed volumes.
Exhibit 9: Aleris EBITDA bridge
Source: Aleris
8 May 2019
4
 Motilal Oswal Financial Services
Hindalco
Exhibit 10: Target price derivation
Y/E March
EBITDA
EV/EBTIDAx
Target EV
Net Debt
EQ = (EV-net Debt)
A. INR/share(EQ)
CWIP
AA. INR/share (CWIP)
Eq. Value (A+AA) INR/sh.
Assumptions
USD/INR
LME
Net debt/EBITDA (x)
2017
124,359
2018
138,204
6.0
829,222
400,543
428,679
192
20,629
9
202
64.7
2,044
2.9
2019
159,659
6.0
957,953
413,656
544,297
244
35,744
16
260
70.0
2,035
2.6
2020E
187,223
6.0
1,123,339
560,873
562,466
252
78,426
35
288
73.4
1,900
3.0
2021E
197,167
6.0
1,183,002
494,251
688,751
309
108,630
49
358
73.4
1,900
2.5
465,385
67.1
1,687
3.7
Source: MOFSL, Company
8 May 2019
5
 Motilal Oswal Financial Services
Hindalco
Financials and Valuations
Income Statement
Y/E Mar
Net Sales
Change (%)
EBITDA
EBITDA Margin (%)
Depreciation
EBIT
Interest
Other Income
Extraordinary items
PBT
Tax
Tax Rate (%)
Min. Int. & Assoc. Share
Reported PAT
Adjusted PAT
Change (%)
2014
876,955
9.4
82,863
9.4
35,528
47,335
27,016
10,172
-3,960
26,531
5,249
19.8
-468
21,750
25,710
-20.9
2014
2,065
403,984
406,048
17,805
646,952
31,750
1,102,555
748,947
267,361
481,586
169,371
230,593
23,381
474,889
166,943
92,348
117,121
98,477
277,263
197,626
1,102,555
2015
1,042,811
18.9
89,446
8.6
35,906
53,540
41,784
11,047
-19,401
3,402
2,564
75.4
-7,704
8,542
27,943
8.7
2015
2,065
381,220
383,285
9,561
684,050
25,552
1,102,448
887,802
299,816
587,986
165,651
141,113
23,216
499,495
184,511
91,864
119,289
103,830
315,011
184,484
1,102,448
2016
987,589
-5.3
86,542
8.8
43,468
43,074
51,338
11,888
-5,765
-2,141
4,984
-232.8
-6,223
-902
4,863
-82.6
2016
2,049
404,017
406,066
3,813
674,754
20,970
1,105,603
1,057,871
378,494
679,377
177,353
42,138
47,488
465,104
167,873
79,184
120,962
97,085
305,857
159,247
1,105,603
2017
1,001,838
1.4
124,359
12.4
44,572
79,786
57,424
11,110
-76
33,395
14,326
42.9
77
18,992
19,069
292.1
2017
2,227
458,361
460,588
62
637,515
20,168
1,118,333
1,040,510
364,991
675,518
171,350
18,139
62,057
529,543
182,914
82,748
172,129
91,752
338,275
191,269
1,118,333
2018
1,151,717
15.0
138,204
12.0
45,062
93,141
39,107
10,046
17,742
81,821
20,742
25.4
1,250
59,829
42,088
120.7
2018
2,229
546,289
548,518
86
520,155
31,333
1,100,092
1,082,644
410,054
672,590
178,294
20,629
68,778
529,846
216,314
99,598
119,612
94,322
370,046
159,800
1,100,092
2019
1,286,917
11.7
159,659
12.4
46,970
112,689
38,117
7,426
-8,536
73,461
21,169
28.8
1,250
51,042
59,577
41.6
2019
2,229
593,352
595,581
86
532,444
35,567
1,163,678
1,145,159
457,024
688,135
178,294
35,744
74,027
553,349
231,190
109,049
118,788
94,322
365,871
187,478
1,163,678
(INR Million)
2020E
1,481,814
15.1
187,223
12.6
59,857
127,366
49,259
6,480
0
84,586
23,447
27.7
1,250
59,889
59,889
0.5
2021E
1,535,957
3.7
197,167
12.8
60,390
136,777
47,456
6,892
0
96,213
26,577
27.6
1,250
68,385
68,385
14.2
Balance Sheet
Y/E Mar
Share Capital
Reserves
Net Worth
Minority Interest
Debt
Deferred Tax
Total Capital Employed
Gross Fixed Assets
Less: Acc Depreciation
Net Fixed Assets
Goodwill on consolidation
Capital WIP
Investments
Current Assets
Inventory
Debtors
Cash & Bank
Loans & Adv, Others
Curr Liabs & Provns
Net Current Assets
Total Assets
(INR Million)
2020E
2021E
2,229
2,229
648,997 712,873
651,226 715,102
86
86
668,759 598,759
40,256
45,571
1,360,327 1,359,519
1,356,369 1,384,719
516,881 577,271
839,488 807,448
178,294 178,294
78,426 108,630
72,777
71,526
590,901 601,725
260,642 270,166
128,051 132,730
107,886 104,508
94,322
94,322
399,558 408,104
191,343 193,621
1,360,327 1,359,519
8 May 2019
6
 Motilal Oswal Financial Services
Hindalco
Financials and Valuations
Ratios
Y/E Mar
Basic (INR)
EPS
Cash EPS
Book Value
DPS
Payout (incl. Div. Tax.)
Valuation(x)
P/E
Cash P/E
Price / Book Value
EV/EBITDA
Dividend Yield (%)
Profitability Ratios (%)
RoE
RoCE
RoIC (pre-tax)
Turnover Ratios (%)
Asset Turnover (x)
Debtors (No. of Days)
Inventory (No. of Days)
Creditors (No. of Days)
Leverage Ratios (%)
Net Debt/Equity (x)
2014
12.5
27.5
114.6
1.0
9.4
16.1
7.3
1.8
11.4
0.5
11.6
5.5
7.6
0.8
38
69
54
2.2
2014
82,863
-4,821
9,623
-9,586
0
78,079
-94,236
-16,156
10,910
1,672
-81,655
16,305
48,689
-46,919
-3,149
14,926
11,351
105,771
117,121
2015
13.5
17.8
105.4
1.0
8.6
14.8
11.3
1.9
10.9
0.5
12.3
5.9
6.9
0.9
32
65
54
2.6
2015
89,446
-5,872
-863
-11,280
0
71,431
-59,776
11,655
15,680
-796
-44,892
47
28,323
-50,253
-2,488
-24,371
2,168
117,121
119,289
2016
2.4
17.7
111.6
1.0
49.3
84.5
11.3
1.8
11.1
0.5
2.2
4.9
5.0
0.9
29
62
56
2.4
2016
86,542
1,543
41,083
-12,291
0
116,877
-42,452
74,426
15,859
6
-26,586
1
-36,003
-50,057
-2,558
-88,619
1,673
119,289
120,962
2017
8.6
28.6
129.9
1.1
15.0
23.4
7.0
1.5
7.3
0.5
7.1
8.2
9.1
0.9
30
67
65
1.6
2017
124,359
3,622
6,691
-7,797
0
126,875
-29,376
97,499
5,667
3,524
-20,185
33,141
-25,430
-60,754
-2,479
-55,523
51,167
120,962
172,129
2018
18.9
47.6
166.1
1.4
8.7
10.6
4.2
1.2
6.1
0.7
12.8
9.3
10.8
1.0
32
69
65
1.1
2018
138,204
2,617
-17,862
-14,081
0
108,877
-30,008
78,870
24,685
8,052
2,730
162
-122,863
-38,486
-2,938
-164,124
-52,517
172,129
119,612
2019
26.7
44.5
187.2
1.5
6.6
7.5
4.5
1.1
5.4
0.7
15.1
10.6
12.3
1.1
31
66
57
1.0
2019
159,659
-4,995
-28,502
-16,936
0
109,227
-59,747
49,480
7,426
-6,500
-58,821
0
-5,593
-38,117
-3,979
-47,689
2,717
119,612
122,329
2020E
26.9
54.3
212.2
1.6
7.0
7.5
3.7
0.9
5.4
0.8
13.5
10.6
12.5
1.1
32
64
58
1.2
2020E
187,223
0
-14,768
-18,757
0
153,698
-71,032
82,666
6,480
-191,024
-255,577
0
144,478
-49,259
-4,244
90,975
-10,903
118,788
107,885
2021E
30.7
58.3
240.8
1.7
6.5
6.5
3.4
0.8
4.8
0.8
13.5
10.6
12.6
1.1
32
64
58
0.9
2021E
197,167
0
-5,656
-21,262
0
170,250
-58,554
111,695
6,892
0
-51,663
0
-70,000
-47,456
-4,509
-121,965
-3,378
107,886
104,508
Cash Flow Statement
Y/E Mar
Adjusted EBITDA
Non cash opr. exp (inc)
(Inc)/Dec in Wkg. Cap.
Tax Paid
Other operating activities
CF from Op. Activity
(Inc)/Dec in FA & CWIP
Free cash flows
(Pur)/Sale of Invt
Others
CF from Inv. Activity
Inc/(Dec) in Net Worth
Inc / (Dec) in Debt
Interest Paid
Divd Paid (incl Tax) & Others
CF from Fin. Activity
Inc/(Dec) in Cash
Add: Opening Balance
Closing Balance
(INR Million)
8 May 2019
7
 Motilal Oswal Financial Services
Hindalco
NOTES
8 May 2019
8
 Motilal Oswal Financial Services
Hindalco
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Securities Ltd. (MOSL)* is a SEBI Registered Research Analyst having registration no. INH000000412. MOSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOSL is a subsidiary company of Motilal Oswal Financial Service Ltd. (MOFSL). MOFSL is a listed public company, the details in respect of which are available on
www.motilaloswal.com.
MOSL is registered with the Securities & Exchange Board of India (SEBI) and is a registered Trading Member with National Stock Exchange of India Ltd.
(NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India (MCX) & National Commodity & Derivatives Exchange Ltd. (NCDEX) for its stock broking
activities & is Depository participant with Central Depository Services Limited (CDSL) & National Securities Depository Limited (NSDL) and is member of Association of Mutual
Funds of India (AMFI) for distribution of financial products. Details of associate entities of Motilal Oswal Securities Limited are available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report should
be aware that MOSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific merchant
banking, investment banking or brokerage service transactions. Details of pending Enquiry Proceedings of Motilal Oswal Securities Limited are available on the website at
https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from
MOSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
Regional Disclosures (outside India)
This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
or use would be contrary to law, regulation or which would subject MOSL & its group companies to registration or licensing requirements within such jurisdictions.
For Hong Kong:
This report is distributed in Hong Kong by Motilal Oswal capital Markets (Hong Kong) Private Limited, a licensed corporation (CE AYY-301) licensed and regulated by the Hong
Kong Securities and Futures Commission (SFC) pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) “SFO”. As per SEBI (Research Analyst
Regulations) 2014 Motilal Oswal Securities (SEBI Reg No. INH000000412) has an agreement with Motilal Oswal capital Markets (Hong Kong) Private Limited for distribution of
research report in Hong Kong. This report is intended for distribution only to “Professional Investors” as defined in Part I of Schedule 1 to SFO. Any investment or investment activity
to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Securities Limited (MOSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under applicable state
laws in the United States. In addition MOSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together
with the 1934 Act, the "Acts), and under applicable state laws in the United States. Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment
services provided by MOSL , including the products and services described herein are not available to or intended for U.S. persons. This report is intended for distribution only to
"Major Institutional Investors" as defined by Rule 15a-6(b)(4) of the Exchange Act and interpretations thereof by SEC (henceforth referred to as "major institutional investors"). This
document must not be acted on or relied on by persons who are not major institutional investors. Any investment or investment activity to which this document relates is only
available to major institutional investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the
U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct
business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S. registered broker-dealer, Motilal Oswal Securities International
Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this chaperoning agreement.
The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
services license and an exempt financial adviser in Singapore.As per the approved agreement under Paragraph 9 of Third Schedule of Securities and Futures Act (CAP 289) and
Paragraph 11 of First Schedule of Financial Advisors Act (CAP 110) provided to MOCMSPL by Monetary Authority of Singapore. Persons in Singapore should contact MOCMSPL
in respect of any matter arising from, or in connection with this report/publication/communication. This report is distributed solely to persons who qualify as “Institutional Investors”,
of which some of whom may consist of "accredited" institutional investors as defined in section 4A(1) of the Securities and Futures Act, Chapter 289 of Singapore (“the
SFA”). Accordingly, if a Singapore person is not or ceases to be such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and
inform MOCMSPL.
Specific Disclosures
1 MOSL, Research Analyst and/or his relatives does not have financial interest in the subject company, as they do not have equity holdings in the subject company.
2 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOSL has not received any compensation or other benefits from third party in connection with the research report
10 MOSL has not engaged in market making activity for the subject company
****************************************************************
****************************************************************
8 May 2019
9
 Motilal Oswal Financial Services
Hindalco
The associates of MOSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Terms & Conditions:
This report has been prepared by MOSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
of MOSL. The report is based on the facts, figures and information that are considered true, correct, reliable and accurate. The intent of this report is not recommendatory in nature.
The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. The
report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for
informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nothing
in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this
document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
document (including the merits and risks involved), and should consult its own advisors to determine the merits and risks of such an investment. The investment discussed or views
expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative products as well as non-investment grade
securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of
information that is already available in publicly accessible media or developed through analysis of MOSL. The views expressed are those of the analyst, and the Company may or
may not subscribe to all the views expressed therein. This document is being supplied to you solely for your information and may not be reproduced, redistributed or passed on,
directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not directed or intended for distribution to, or use by, any person or
entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law,
regulation or which would subject MOSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all
jurisdictions or to certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither
the Firm, not its directors, employees, agents or representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue
or lost profits that may arise from or in connection with the use of the information.
The person accessing this information specifically agrees to exempt MOSL or any of its affiliates
or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSL or any of its affiliates or employees responsible for any such misuse
and further agrees to hold MOSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing
this information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022-3980
4263; www.motilaloswal.com. Correspondence Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080
1000. Compliance Officer: Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-38281085.
Registration details: MOSL: SEBI Registration: INZ000158836 (BSE/NSE/MCX/NCDEX); CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412.
AMFI: ARN 17397. Investment Adviser: INA000007100. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual
Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.: INP000004409) offers wealth management solutions. *Motilal Oswal Securities Ltd.
is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. *Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate
products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private Equity products.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench. The existing registration no(s) of MOSL would be used until receipt of new MOFSL registration numbers.
8 May 2019
10