Hindalco Industries (HINDAL)

Result Update
February 13, 2015
Rating matrix
Rating
Target
Target Period
Potential Upside
:
:
:
:
Hindalco Industries (HINDAL)
Hold
| 150
12 months
-1%
Topline in line, EBITDA, PAT miss estimate…
What’s Changed?
Target
EPS FY15E
EPS FY16E
EPS FY17E
Rating
Chnaged from | 148 to | 150
Changed from | 11.4 to | 12.0
Changed from | 19.5 to | 14.3
Introduced at | 17.4
Unchanged
Quarterly Performance (Standalone)
Revenue
EBITDA
EBITDA (%)
PAT
Q3FY15
8,603.0
923.3
10.7
359.4
Q3FY14
7,273.1
629.5
8.7
334.0
YoY (%)
18.3
46.7
208 bps
7.6
Q2FY15
8,554.3
897.0
10.5
78.8
QoQ (%)
0.6
2.9
25 bps
356.2
Key Financials (Cons)
| Crore
Net Sales
EBITDA
Net Profit
EPS (|)
FY14
87695.5
8286.3
2175.0
10.5
FY15E
100766.4
9959.9
2471.3
12.0
FY16E
105550.9
11072.1
2944.3
14.3
FY17E
114369.9
12272.7
3599.6
17.4
Valuation summary
P/E (Diluted)
Target P/E
EV / EBITDA
P/BV
RoNW
RoCE
FY14
14.4
14.3
10.0
0.8
5.4
4.5
FY15E
12.7
12.6
8.7
0.7
5.8
5.4
FY16E
10.7
10.6
7.6
0.7
6.5
5.9
FY17E
8.7
8.6
6.9
0.6
7.4
6.4
Stock data
Stock Data
Market Capitalization
Total Debt (FY14)
Cash and Investments (FY14)
EV
52 week H/L
Equity capital
Face value
| 31553.2 Crore
| 63348.4 Crore
| 11712.2 Crore
| 83021.2 Crore
199 / 97
| 206.5 Crore
|1
Price performance (%)
Return %
Hindustan Zinc
Sesa-Sterlite
Hindalco Ind
1M
12.3
0.2
-3.3
3M
11.9
-14.7
-0.9
| 152
6M
14.2
-24.4
-19.3
12M
46.6
10.3
43.3
Research Analyst
Dewang Sanghavi
dewang.sanghavi@icicisecurities.com
Isha Bansal
isha.bansal@icicisecurities.com
ICICI Securities Ltd | Retail Equity Research
• Hindalco reported a mixed set of Q3FY15 (standalone) numbers
wherein the operating income was in line with our estimates whereas
EBITDA and PAT were below our estimates on account of higherthan-expected other expenses
• Hindalco reported total operating income of | 8603.0 crore, up 0.6%
QoQ and 18.3% YoY and in line with our estimate of | 8600.1 crore
• The company reported a standalone EBITDA of | 923.3 crore
(EBITDA margin: 10.7%), up 2.9% QoQ and 46.7% YoY but lower
than our estimate of | 968.1 crore (EBITDA margin: 11.3%)
• The standalone PAT came in at | 359.4 crore, up 7.6% YoY but
below our estimate of | 466.6 crore
• Sales volume for Q3FY15 came in at 83 KT for alumina, 202.2 KT for
aluminium and 95 KT for copper
Production at inflection point for domestic operations
Hindalco is a metal major with business interests in copper smelting &
aluminium manufacturing domestically. The company is also a leading
aluminium converter globally through subsidiary Novelis. On the
domestic aluminium business front, the company is undergoing an
ambitious capacity expansion wherein its aluminium (primary metal)
production capacity is expected to increase from 560 KT currently to 1278
KT by the end of FY15E. Subsequently, we expect domestic aluminium
metal production to grow at 19.6% CAGR in FY14-17E.
Novelis: Stable performance; improving product mix to aid margins
In 2007, Hindalco acquired Novelis for ~US$6.0 billion, including debt in
an all-cash transaction. Novelis is one of the world’s leading aluminium
rolling and recycling companies supplying premium products (beverage
cans, automotive and high-end specialities) in the markets of North
America, Europe, Asia and South America. Novelis’ sales volumes are
expected to grow at a CAGR of 6.0% in FY14-17E. On the back of
increasing share of the automobile segment in the overall sales mix, we
expect the EBITDA/tonne to improve from US$289/tonne in FY14 to
US$320/tonne by FY15E and further to US$350/tonne in FY16E and
FY17E.
Miss on operational performance; maintain HOLD!!
Hindalco’s Q3FY15 performance came in lower than our estimates on
account of higher operating costs. Going forward, we expect domestic
operations to report a stable performance while Novelis’ performance is
likely to improve, going forward, on account of the increasing share of the
high margin automotive segment in the overall product mix. We have
valued Hindalco on an SOTP basis, thereby arriving at a target price of
| 150. We maintain our HOLD rating on the stock.
Variance analysis
Q2FY15 QoQ (%)
8,554.3
0.6
223.4
-4.9
Comments
Topline came in broadly in line with our estimate
Other income came in line with our estimates
15.6
7,657.3
0.3
Manufacturing expense came in higher than our estimate
629.5
46.7
8.7 208 bps
199.8
8.2
165.2
170.9
2.9
25 bps
10.3
16.0
Total Operating Income
Other Income
Q3FY15 Q3FY15E
8,603.0 8,600.1
212.5
209.4
Q3FY14
7,273.1
204.2
YoY (%)
18.3
4.1
Total Manufacturing Expense
7,679.7
7,632.0
6,643.6
923.3
10.7
216.3
447.5
0.0
472.1
112.7
359.4
968.1
11.3
216.5
377.7
0.0
583.3
116.7
466.6
EBITDA
EBITDA Margin (%)
Depreciation
Interest
Exceptional item
PBT
Tax Outgo
PAT
Key Metrics
Total Copper Production (tonne)
Total Aluminium Production (tonne)
95000 98,000
217000 206,000
Novelis, Rolled Product Shipments (Kt)
Novelis, EBITDA/tonne (US$/tonne)
757
312
EBITDA came in lower than our estimate on account of higher other
expenses
EBITDA margins came in lower than our estimate
Depreciation came in line with our estimate
Interest came in higher than estimate
468.8
134.7
334.0
0.7
-16.3
7.6
897.0
10.5
196.0
385.7
431.2
107.4
28.6
78.8
89000
140000
6.7
55.0
96000
187000
-1.0
16.0
Copper metal production came in lower than our estimate
Aluminium metal production came in higher than our estimate
721
270
5.0
15.6
770
316
-1.7
-1.1
Novelis metal sales were lower-than-expected
Novelis EBITDA/tonne came in as expected
785
320
339.7
294.1
356.2
PAT came in lower than our estimate on account of lower EBITDA
Source: Company, ICICIdirect.com Research
Change in estimates
(| Crore)
Revenue
EBITDA
EBITDA Margin (%)
PAT
EPS (|)
FY16E
Old
New % Change
107,038.3 105,550.9
-1.4
11,747.1 11,072.1
-5.7
11.0
10.5
-48 bps
3,645.6
2,944.3
-19.2
17.7
14.3
-19.4
FY17E
Old
New % Change
NA 114,369.9
NA
NA 12,272.7
NA
NA
10.7
NA
NA
3,599.6
NA
NA
17.4
NA
Comments
Downward revised FY16 revenue estimates
Downward revised FY16E EBITDA estimates
Downward revised FY16 PAT estimates
Source: Company, ICICIdirect.com Research
Assumptions
Total Copper Production (Kt)
Total Aluminium Production (Kt)
Novelis, Rolled Product Shipments (Kt)
Novelis, EBITDA/tonne (US$/tonne)
LME Aluminium (US$/tonne)
LME Copper (US$/tonne)
USD: INR
FY14
330
594
2,895
289
1,774
7108
60
Current
FY15E
390
790
3,101
320
1,936
6800
58
FY16E
417
890
3,287
350
1,897
6728
60
Earlier
FY15E
390
790
3,101
320
1,959
6800
58
FY16E
417
890
3,287
350
2,100
6728
58
FY17E
430
1,015
3,484
350
1,950
6820
60
Comments
Maintained estimates
Maintained estimates
Maintained estimates
Maintained estimates
Downward revised aluminium LME prices
Maintained estimates
Changed FY16 estimates
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Page 2
Company Analysis
Hindalco is a metal major with business interests in copper smelting &
aluminium manufacturing domestically. It is also a leading aluminium
converter globally through subsidiary Novelis. HIL also owns 51% of
Aditya Birla Minerals (ABML, Australia).
Aluminium business leads the way; capacity expansion - key growth driver
The company is currently in the midst of an ambitious capacity expansion
plan wherein it is planning to expand its aluminium capacity to 1.3 MTPA
(0.56 MTPA currently) and alumina capacity to 3.0 MTPA (1.5 MTPA
currently). Aluminium capacity expansion is being carried out through
two greenfield projects viz. Mahan and Aditya while alumina capacity
expansion is being carried out through the Utkal alumina refinery.
Exhibit 1: Alumina production
Exhibit 2: Aluminium (primary metal) production
3500
2201
2500
1500
1355
1000
2395
800
1631
1319
KT
KT
2000
1200
2870
3000
600
790
574
541
594
FY12
FY13
FY14
890
1015
400
1000
500
200
0
0
FY12
FY13
FY14
FY15E
FY16E
FY17E
FY15E
FY16E
FY17E
Source: Company, ICICIdirect.com Research
Source: Company, ICICIdirect.com Research
On the back of a satisfactory ramp up of new facilities, we expect alumina
and aluminium production to grow at a CAGR of 20.7% and 19.6%,
respectively, going forward, in FY14-17E.
Stable copper business; Tc/Rc likely to remain firm
Hindalco’s copper business is predominantly a convertor one and is
largely insulated from copper prices. As Hindalco operates custom
smelting operations, profits from this part of the business do not really
depend on copper prices but on variables such as treatment and refining
charges earned and realisations on the sale of by-products.
Exhibit 4: Copper division topline and EBIT trend
FY15E
FY16E
FY17E
KT
300
200
100
0
Copper cathode production
802
768
882
1400
1200
1000
800
600
400
200
0
| Crore
FY14
430
1371
21913
FY13
417
20917
FY12
390
20111
316
330
17849
330
1305 1312
17306
400
| Crore
500
23000
22000
21000
20000
19000
18000
17000
16000
15000
17556
Exhibit 3: Copper production trend
FY12 FY13 FY14 FY15E FY16E FY17E
Topline (LHS)
EBIT (RHS)
Source: Company, ICICIdirect.com Research
Source: Company, ICICIdirect.com Research
Going forward, the company expects Tc/Rc margins to remain robust on
account of an increase in global mine metal supply from brownfield and
greenfield expansions.
ICICI Securities Ltd | Retail Equity Research
Page 3
Novelis - global leader; performance par excellence!!
Novelis is a subsidiary of Hindalco Industries that converts primary
aluminium into rolled aluminium, which is used for manufacturing valueadded products, namely, cans, automobiles, flat sheets, foils, etc. It has
an installed capacity of 3 MTPA and has been operating at ~90%+
capacity utilisation rates in the past five financial years.
Exhibit 6: Novelis topline, EBITDA & EBITDA/tonne trend
14000
3500
2500
FY12
3484
3287
3101
2786
2750
2895
3000
US$ Million
3250
2838
Tonne (in Kt)
12000
11063
9812
9806
11084
11495
12369
500
400
10000
8000
6000
330
336
320
289
350
300
350
200
4000
100
2000
0
0
FY13
FY14
FY15E
FY16E
FY12
FY17E
Sales Volume (Rolled Products)
Source: Company, ICICIdirect.com Research
US$/tonne
Exhibit 5: Novelis rolled product shipments
FY13
FY14
FY15E
Sales (LHS)
FY16E
FY17E
EBITDA/tonne (RHS)
Source: Company, ICICIdirect.com Research
Among major geographies in which Novelis operates (namely North
America, Europe, Asia and South America) North America constitutes the
majority with share of shipments amounting to ~36% in terms of volume
(FY14).
Increase in recycle content, focus on automotive segment bodes well
Novelis is in the process of expanding its capacity from 3 MTPA to ~3.7
MTPA by FY16E at an estimated capex of ~US$1.5 billion through setting
up of new capacity and undertaking de-bottlenecking activity at its
principal locations. The capex incurred/to be incurred has been focused
on emerging markets, auto industry applications and recycling. Novelis
has invested in major recycling initiatives in all four operating regions,
thus progressing towards its goal of achieving recycle content of 50% in
its products by 2015 and further to 80% by 2020.
Novelis performance
Novelis, the overseas rolled products manufacturing subsidiary of
Hindalco Industries, has announced its Q3FY15 numbers. The total rolled
product shipments for Q3FY15 came in at 757 KT, lower than our
expectation of 785 KT. Revenue for the quarter stood at US$2.8 billion as
compared to US$2.4 billion in Q3FY14, up 18% YoY. The EBITDA for the
quarter stood at US$236 million with corresponding EBITDA/tonne at
US$312/tonne (I-direct estimate: EBITDA of US$251 million,
EBITDA/tonne US$320/tonne). The subsequent net income for the quarter
stood at US$46 million.
ICICI Securities Ltd | Retail Equity Research
Page 4
Outlook and valuation
Hindalco’s Q3FY15 performance came in lower than our estimates on
account of higher operating costs. Going forward, we expect domestic
operations to report a stable performance while Novelis’ performance is
likely to improve, going forward, on account of the increasing share of the
high margin automotive segment in the overall product mix. We have
valued Hindalco on an SOTP basis, thereby arriving at a target price of
| 150. We maintain our HOLD rating on the stock.
Exhibit 7 : Target price calculation
Particulars
Indian copper business EBITDA (FY17E, | crore)
Australian copper business EBITDA (FY17E, | crore)
Value
1627
243
Multiple
5.5
5.5
Indian aluminium business EBITDA (FY17E, | crore)
Novelis EBITDA (FY17E, | crore)
Total enterprise value (| crore), A
FY17E gross debt (| crore), B
FY17E cash & cash equivalent (| crore), C
FY17E net debt (| crore), D=B-C
FY17E minority interest (| crore), E
Value of investments (quoted, at 30% discount), F
Implied Equity Value, Market Cap (| Crore), H=A-D-E+F+G
No.of shares, I
Implied target price (|), H/I
3086
7317
6.5
7.0
Enterprise Value
8948
1334
20061
51219
81562
66348
12694
53655
1608
4768
31067
206.5
150
Source: Company, ICICIdirect.com Research
Exhibit 8 : Valuation matrix
FY14
FY15E
FY16E
FY17E
Sales
(| cr)
87695.5
100766.4
105550.9
114369.9
Growth
(%)
-0.9
14.9
4.7
8.4
EPS
(|)
10.5
12.0
14.3
17.4
Growth
(%)
-10.9
13.6
19.1
22.3
PE
(x)
14.4
12.7
10.7
8.7
EV/EBITDA
(x)
10.0
8.7
7.6
6.9
RoNW
(%)
5.4
5.8
6.5
7.4
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Page 5
RoCE
(%)
4.5
5.4
5.9
6.4
Company snapshot
300
250
200
Target Price: 150
150
100
50
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
0
Source: Bloomberg, Company, ICICIdirect.com Research
Key events
Date/Year
2000
2002
2003
2004
2005
2006
2007
2008
2009
2011
2013
Event
Acquisition of a controlling stake in Indian Aluminium Company (Indal, capacity 43000 TPA of primary aluminium metal along with copper smelter)
Acquisition of Indo Gulf Corporation's copper business (Birla Copper, capacity 150,000 TPA)
Acquisition of Mt Gordon & Nifty copper mines through ABML, brownfield expansion of aluminium smelter at Renukoot raising capacity to 345000 TPA
Copper smelter expansion, capacity raised to 250000 TPA
MoUs signed with state governments of Odisha and Jharkhand to set up greenfield alumina refining, smelting and power plants; commissioned copper III expansion,
taking total capacity of copper smelter to 500000 TPA
Comes out with a right issue amounting to | 2226.6 crore; enters into JV with Essar Power (MP) to develop and operate coal mines in Mahan, Madhya Pradesh;
company splits shares in ratio of 1:10
In May 2007, Novelis becomes a Hindalco subsidiary with the completion of acquisition process. The transaction makes Hindalco the world's largest aluminium
rolling company and one of the largest producers of primary aluminium in Asia; acquisition of Alcan's 45% stake in Utkal Alumina project makes Hindalco the 100%
project owner
Comes out with rights issue: raises | 4426 crore for re-financing bridge loan taken for Novelis acquisition; Hindalco Alex Aerospace (HAAL) facility becomes
operational and produces largest aluminium billet of 42 inch diameter
Raises US$600 million through QIP route for projects
Refinances Novelis debt amounting to US$4 billion; achieves financial closure of two projects through debt financing -Utkal Alumina for | 4906 crore and Mahan
Aluminium for | 7875 crore
Promoter infuses capital into the company by way of conversion of warrants (@| 143/share), of total | 2150 crore
Source: Company, ICICIdirect.com Research
Top 10 Shareholders
Shareholding Pattern
Rank
1
2
3
4
5
6
7
8
9
10
(in %)
Promoter
FII
DII
Others
Name
Latest Filing Date % O/S Position (m) Change (m)
Aditya Birla Group
30-Sep-14 33.14
684.3
0.0
LIC Nomura Mutual Fund Asset Management Company L
30-Sep-14 9.32
192.5
-36.4
Dimensional Fund Advisors, L.P.
31-Dec-14 1.71
35.2
-1.4
Bajaj Allianz Life Insurance Company Limited
30-Sep-14 1.52
31.4
-1.7
Umang Commercial Co., Ltd.
30-Sep-14 1.32
27.3
0.0
BlackRock Institutional Trust Company, N.A.
31-Jan-15 1.23
25.3
2.2
The Vanguard Group, Inc.
31-Jan-15 1.07
22.1
-2.1
Birla Institute of Technology & Science
30-Sep-14 1.05
21.6
0.0
Platinum Investment Management Ltd.
30-Sep-14 1.04
21.5
-8.8
Skagen AS
30-Sep-14 0.92
19.0
19.0
Dec-13 Mar-14
37.0
37.0
26.9
26.9
13.3
14.4
22.8
21.7
Jun-14
37.0
27.6
14.1
21.3
Sep-14
37.0
29.5
11.9
21.7
Dec-14
37.0
28.9
12.7
21.4
Source: Reuters, ICICIdirect.com Research
Recent Activity
Buys
Investor name
Skagen AS
Franklin Advisers, Inc.
ICICI Prudential Asset Management Co. Ltd.
TGS Investment & Trade Pvt. Ltd.
J.P. Morgan Asset Management (Hong Kong) Ltd.
Value
48.05m
17.78m
12.54m
8.91m
8.02m
ICICI Securities Ltd | Retail Equity Research
Shares
18.98m
6.35m
5.02m
4.49m
3.52m
Sells
Investor name
LIC Nomura Mutual Fund Asset Management Company Ltd.
Platinum Investment Management Ltd.
Eastspring Investments (Singapore) Limited
Waddell & Reed Investment Management Company
The Vanguard Group, Inc.
Value
-92.24m
-22.25m
-7.77m
-4.62m
-4.12m
Shares
-36.44m
-8.79m
-3.29m
-2.46m
-2.05m
Page 6
Financial summary
Profit and loss statement
(Year-end March)
Net Sales
Other Operating Income
Total Operating Income
Growth (%)
Total Operating Expenditure
EBITDA
Growth (%)
Depreciation
Interest
Other Income
Exceptional Item
PBT
Total Tax
PAT
Growth (%)
Minorities, Associates etc
Rep PAT after Assoc., MI
Adj PAT after Assoc., MI
Growth (%)
Adj EPS (|)
| Crore
FY14
87695.5
0.0
87695.5
(0.8)
79409.2
8286.3
5.7
3552.8
2701.6
1017.2
396.0
2653.1
524.9
2128.2
-10.9
46.8
2175.0
2175.0
-28.1
10.5
FY15E
100766.4
0.0
100766.4
14.9
90806.5
9959.9
20.2
4106.8
3346.1
858.2
431.2
2934.0
586.8
2347.2
10.3
124.1
2471.3
2471.3
13.6
12.0
FY16E
105550.9
0.0
105550.9
4.7
94478.8
11072.1
11.2
4477.6
3920.9
850.7
0.0
3524.3
704.9
2819.4
20.1
124.9
2944.3
2944.3
19.1
14.3
FY17E
114369.9
0.0
114369.9
8.4
102097.2
12272.7
10.8
4797.6
3980.9
850.7
0.0
4344.8
869.0
3475.9
23.3
123.7
3599.6
3599.6
22.3
17.4
(Year-end March)
Profit after Tax
Add: Depreciation
Add: Interest
(Inc)/dec in Current Assets
Inc/(dec) in CL and Prov.
CF from operating activities
(Inc)/dec in Investments
(Inc)/dec in Fixed Assets
Others
CF from investing activities
Issue/(Buy back) of Equity
Inc/(dec) in loan funds
Interest Paid
Dividend paid & dividend tax
Inc/(dec) in Share Cap
Others
CF from financing activities
Net Cash flow
Opening Cash
Closing Cash
| Crore
FY14
2175.0
3552.8
2701.6
-3308.6
6122.1
11242.9
-360.1
-16013.0
-464.3
-16837.4
15.0
6442.3
-2701.6
-241.6
3862.0
-535.7
6840.4
1245.8
3775.5
5021.3
FY15E
2471.3
4106.8
3346.1
-5259.6
3325.5
7990.2
250.0
-7200.0
-197.4
-7147.4
0.0
1000.0
-3346.1
-241.6
0.0
0.0
-2587.7
-1744.9
5021.3
3276.4
FY16E
2944.3
4477.6
3920.9
-829.0
1483.3
11997.1
150.0
-5000.0
-101.1
-4951.1
0.0
1000.0
-3920.9
-241.6
0.0
0.0
-3162.5
3883.5
3276.4
7160.0
FY17E
3599.6
4797.6
3980.9
-4060.5
2734.1
11051.7
150.0
-8000.0
-136.3
-7986.3
0.0
1000.0
-3980.9
-241.6
0.0
0.0
-3222.5
-157.0
7160.0
7002.9
FY14
FY15E
FY16E
FY17E
10.5
27.7
196.7
1.0
24.3
12.0
31.9
207.5
1.0
15.9
14.3
35.9
220.5
1.0
34.7
17.4
40.7
236.8
1.0
33.9
9.4
3.0
2.5
66
41
66
9.9
2.9
2.5
69
38
85
10.5
3.3
2.8
70
39
82
10.7
3.8
3.1
70
40
82
8.6
5.3
9.1
5.4
4.5
6.1
5.8
5.4
6.5
6.5
5.9
7.0
14.4
10.0
0.9
0.4
0.8
12.7
8.7
0.9
0.3
0.7
10.7
7.6
0.8
0.3
0.7
8.7
6.9
0.7
0.3
0.6
7.6
1.6
1.4
0.8
6.5
1.5
1.4
0.8
5.9
1.4
1.5
0.9
5.4
1.4
1.5
0.9
Source: Company, ICICIdirect.com Research
Source: Company, ICICIdirect.com Research
Balance sheet
(Year-end March)
Liabilities
Equity Share Capital
Reserve and Surplus
Total Shareholders funds
Total Debt
Deferred Tax Liability
Minority Interest & Others
Total Liabilities
Assets
Gross Block
Less: Acc Depreciation
Net Block
CWIP
Investments
Inventory
Debtors
Loans and Advances
Other Current Assets
Cash
Total Current Assets
Current Liabilities
Provisions
Current Liabilities & Prov
Net Current Assets
others
Application of Funds
Cash flow statement
| Crore
FY14
FY15E
FY16E
FY17E
206.5
40392.8
40604.9
63348.4
3188.9
2938.8
110081.0
206.5
42622.6
42834.6
64348.4
3188.9
2881.6
113253.4
206.5
45325.3
45537.4
65348.4
3188.9
2823.5
116898.2
206.5
48683.3
48895.4
66348.4
3188.9
2766.6
121199.3
87669.2
24777.3
62891.9
21331.1
12961.1
16694.3
9234.8
6994.5
2086.2
5021.3
40031.0
20362.6
7552.2
27914.8
12116.2
780.7
110081.0
102669.2
28884.0
73785.2
13531.1
12711.1
19325.1
10766.8
7759.0
2418.4
3276.4
43545.7
22637.9
8602.4
31240.4
12305.4
920.8
113253.5
111940.2
33361.6
78578.5
9260.1
12561.1
20242.6
11567.2
6860.8
2427.7
7160.0
48258.3
23712.8
9010.9
32723.7
15534.6
963.8
116898.1
119940.2
38159.3
81780.9
9260.1
12411.1
21934.0
13160.4
7434.0
2630.5
7002.9
52161.8
25694.1
9763.7
35457.8
16704.0
1043.2
121199.4
Source: Company, ICICIdirect.com Research
Key ratios
(Year-end March)
Per share data (|)
Adj EPS
Cash EPS
BV
DPS
Cash Per Share
Operating Ratios (%)
EBITDA Margin
PBT / Total Operating income
Adj PAT Margin
Inventory days
Debtor days
Creditor days
Return Ratios (%)
Adj RoE
Adj RoCE
RoIC
Valuation Ratios (x)
P/E
EV / EBITDA
EV / Net Sales
Market Cap / Sales
Price to Book Value
Solvency Ratios
Debt/EBITDA
Debt / Equity
Current Ratio
Quick Ratio
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Page 7
ICICIdirect.com coverage universe (Metals & Mining)
CMP
Company
Coal India
(|)
350
EPS (|)
M Cap
TP (|) Rating
360
Hold
P/E (x)
EV/EBITDA (x)
FY14 FY15E FY16E
FY14 FY15E FY16E
FY14 FY15E FY16E FY14 FY15E FY16E
27.8
14.6
14.8
12.6
10.6
32.8
(| Cr)
FY14
FY15E
FY16E
221060
23.9
23.7
9.7
ROCE(%)
8.1
29.7
ROE(%)
26.2
35.6
30.8
30.7
Hindalco Industries
153
150
Hold
31553
10.5
12.0
14.3
14.4
12.7
10.7
10.0
8.7
7.6
5.3
4.5
5.4
8.6
5.4
5.8
Hindustan Zinc
160
192
Buy
77191
16.4
19.4
19.5
9.7
8.3
8.2
6.0
5.2
4.6
16.5
14.6
12.8
18.5
18.7
16.5
JSW Steel
990 1,025
Hold
23930
89.6
102.5
90.7
11.1
9.7
10.9
6.3
5.9
6.4
10.6
11.2
9.5
9.9
10.3
8.5
NMDC
139
175
Buy
55272
16.2
17.2
15.5
8.6
8.2
9.0
4.7
4.3
5.4
25.4
25.2
22.2
21.4
20.6
17.5
SAIL
73
90
Hold
30235
6.3
8.6
12.3
13.4
9.9
6.9
14.1
8.4
6.9
3.6
7.1
8.7
6.3
8.1
10.7
Sesa Sterlite
208
213
Hold
61746
21.2
24.0
22.5
12.0
10.6
11.3
7.1
5.2
5.4
8.8
10.9
9.4
8.6
9.0
7.9
Tata Steel
365
375
Hold
35456
37.3
22.5
25.8
9.5
15.7
13.7
6.3
7.7
7.1
8.7
6.5
6.8
8.5
4.9
5.4
Source: Company, ICICIdirect.com Research
ICICI Securities Ltd | Retail Equity Research
Page 8
RATING RATIONALE
ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns
ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: >10%/15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;
Pankaj Pandey
Head – Research
pankaj.pandey@icicisecurities.com
ICICIdirect.com Research Desk,
ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No 7, MIDC,
Andheri (East)
Mumbai – 400 093
research@icicidirect.com
ICICI Securities Ltd | Retail Equity Research
Page 9
Disclaimer
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ICICI Securities Ltd | Retail Equity Research
Page 10