HINDALCO

Hindalco's major products include standard and speciality grade aluminas and hydrates, aluminium ingots, billets, wire rods, flat rolled products, extrusions and foil.

The integrated facility at Renukoot houses an alumina refinery and an aluminium smelter, along with facilities for the production of semi-fabricated products, namely, redraw rods, flat rolled products and extrusions. The plant is backed by a co-generation power unit and a captive power plant at Renusagar to ensure the continuous supply of power for smelter and other operations.

Birla Copper, Hindalco’s copper unit, is located at Dahej in Gujarat, India.one of the largest single-location copper smelters in the world with a capacity of 500,000 tpa.

Hindalco acquired two Australian copper mines, Nifty and Mt. Gordon, in 2003

The Novelis acquisition carried out by Hindalco Industries Ltd. (HNDL.IN) (HALC.BO) for $6 bn two years ago turned out to be a drag on its stock price, mainly due to the former’s fixed price contracts, most of which expired by the end of CY09.
Hindalco has turned around Novelis faster by cutting costs and replacing old contracts with new
contracts which built in better margins and have costs as pass through.
Novelis has in fact, now announced expansion of capacity by 10% in the next two years.
Around 60% of Hindalco’s earnings comes from Novelis, which is not linked to aluminium prices, which, makes Hindalco a great defensive play with a strong growth option.

capacity expansion of Hindalco’s Muri alumina refinery from 1,10,000 tpa to 4,50,000 tpa is
technically complete and production at the facility is being ramped up in a phased manner

The Novelis turnaround is only the beginning; Hindalco is now on a strong growth path. At
8x PER, Hindalco is also the best valued stock regionally.


Sensitivity low to aluminium price: A 10% increase in aluminium prices will likely increase consolidated earnings for FY11 by about 8%. (Macq)