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HINDALCO: Key takeaways
Delay in greenfield projects. Hindalco does not expect any production from greenfield
projects in FY2012E. The company indicated potential aluminium metal sales of 570-580
kt in FY2012E.
Hindalco expects 20-30% capacity utilization from Utkal Alumina and 40% from Mahan
in FY2013E. Full ramp of production to nameplate capacity will be only in FY2014E.
FY2012E and FY2013E growth drivers include (1) incremental volumes from brownfield
Hirakud expansion; (2) potential revenues from Hirakud flat rolled product plant which
may be commissioned in 2HFY12E; and (3) marginal volumes from greenfield projects.
Tc/Rc for FY2012E may increase to 17c/lb from 13c/lb in FY2011.
Novelis’ capital restructuring increases balance sheet flexibility. Novelis may pay out
US$150 mn of dividend every year to Hindalco, something which was restricted by earlier
covenants. Out of the US$1.7 bn capital returned by Novelis, US$1 bn may be used to
retire overseas debt and the balance may be used by Hindalco to fund its greenfield
projects. Novelis’ annual interest cost after restructuring will likely be US$320/ year.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
HINDALCO: Key takeaways
Delay in greenfield projects. Hindalco does not expect any production from greenfield
projects in FY2012E. The company indicated potential aluminium metal sales of 570-580
kt in FY2012E.
Hindalco expects 20-30% capacity utilization from Utkal Alumina and 40% from Mahan
in FY2013E. Full ramp of production to nameplate capacity will be only in FY2014E.
FY2012E and FY2013E growth drivers include (1) incremental volumes from brownfield
Hirakud expansion; (2) potential revenues from Hirakud flat rolled product plant which
may be commissioned in 2HFY12E; and (3) marginal volumes from greenfield projects.
Tc/Rc for FY2012E may increase to 17c/lb from 13c/lb in FY2011.
Novelis’ capital restructuring increases balance sheet flexibility. Novelis may pay out
US$150 mn of dividend every year to Hindalco, something which was restricted by earlier
covenants. Out of the US$1.7 bn capital returned by Novelis, US$1 bn may be used to
retire overseas debt and the balance may be used by Hindalco to fund its greenfield
projects. Novelis’ annual interest cost after restructuring will likely be US$320/ year.
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