23 February 2021
Update | Sector: Metals
Hindalco
Buy
BSE SENSEX
49,744
S&P CNX
14,676
CMP: INR316
On a firm footing
TP: INR390 (+23%)
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
HNDL IN
2,229
709.6 / 9.6
328 / 85
30/32/46
3124
Strong cash flows to support growth and deleveraging
In its virtual analyst meet on Feb 22, Hindalco (HNDL) laid out its strategy
and capital allocation roadmap for the next five years. While no new
capex plans were announced, the focus remains on growing the
downstream business in India and deleveraging the balance sheet,
supported by strong cash flows in both India and Novelis. Net
debt/EBITDA is targeted to fall to 2.5x by Mar’22 (from the peak of 3.8x in
Jun’20).
We reiterate HNDL as our top non-ferrous pick on the back of a 26% EPS
CAGR over FY21–23E, driven by strong volumes, margins, and
deleveraging. We roll forward our TP to Mar’22 and raise it to INR390.
Financials & Valuations (INR b)
Y/E MARCH
2021E 2022E 2023E
Sales
1,281 1,480 1,537
EBITDA
165.5 195.5 204.4
Adj. PAT
51.3
73.1
82.1
EBITDA Margin (%)
12.9
13.2
13.3
Cons. Adj. EPS (INR)
23.1
32.9
36.9
EPS Gr. (%)
31.9
42.6
12.2
BV/Sh. (INR)
181
211
245
Ratios
Net D:E
1.3
1.0
0.7
RoE (%)
13.1
16.8
16.2
RoCE (%)
8.4
9.8
10.1
Payout (%)
8.6
9.6
8.6
Valuations
P/E (x)
13.7
8.7
7.7
P/BV (x)
1.7
1.3
1.2
EV/EBITDA(x)
7.4
5.6
4.9
Div. Yield (%)
0.5
0.9
0.9
FCF Yield (%)
10.7
14.5
17.1
Shareholding pattern (%)
As On
Sep-20 Jun-20
Promoter
34.7
34.7
DII
25.1
27.3
FII
19.9
18.8
Others
20.4
19.3
FII Includes depository receipts
Stock Performance (1-year)
370
290
210
130
50
Hindalco Inds.
Sensex - Rebased
Sep-19
34.7
25.4
21.4
18.5
Focus on organic growth and deleveraging
The management expects to generate USD1–1.2b annual cash flow post
its normal working capital and maintenance capex. It plans to broadly
allocate this as follows: a) growth capex – 50%, b) deleveraging – 30%, c)
returns to shareholders – 8–10%, and d) balance to be retained in
treasury.
Allocation toward organic growth capex over the next five years is
accordingly guided at ~USD2.5–3.0b – ~USD1.5b in Novelis to grow its
capacity to >4.5mtpa (from 4mtpa currently) and the balance USD1–1.5b
in India to grow its Downstream business. At the same time, it does not
plan to entertain any inorganic growth opportunity.
Out of the post-Aleris acquisition (gross of debt of USD11.1b), HNDL also
plans to repay USD2.9b by Dec’22 – USD2.6b in Novelis and USD0.3b in
India. Net debt/EBITDA is targeted to fall to 2.5x by Mar’22 (from the
peak of 3.8x in Jun’20) – below the pre-Aleris acquisition level of 2.6x in
Mar’20.
HNDL has also revised its dividend distribution policy to now pay out 8–
10% of the consolidated FCF (pre-growth capex). We estimate this to
increase the dividend to INR2.5–3/sh from INR1.2/sh in FY20.
HNDL is our preferred non-ferrous pick owing to a) its strong profitability
in the India Aluminum business from its low-cost integrated operations
(top quartile globally), b) a positive outlook for Novelis, driven by
recovery in auto demand and cost synergies from Aleris, c) solid FCF
generation, which should reduce leverage sharply, and d) reasonable
valuations.
Moreover, with ~75% EBITDA now coming from the non-LME business
(Novelis), we see relatively higher stability in HNDL’s earnings.
Even on our conservative LME aluminum assumption of USD1,850/t, the
valuation is attractive at 4.9x FY23 EV/EBITDA. A USD100/t change in
aluminum price impacts HNDL’s FY22E EPS by 11% and our TP by 9%.
We value it at INR390/sh on FY23 EV/EBITDA – 5x for India and 6x for
Novelis. Reiterate
Buy.
Robust business trading at reasonable valuations; Buy
Amit Murarka - Research analyst
(Amit.Murarka@motilaloswal.com)
Basant Joshi - Research analyst
(Basant.Joshi@motilaloswal.com)
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
 Motilal Oswal Financial Services
Hindalco
Key highlights from virtual analyst meet
Capital allocation framework
It is expected to generate cash flow of over USD1–1.2b p.a. cash post its normal
working capital and maintenance capex. The focus will be on a) growth capex, b)
deleveraging, and c) returns to shareholders.
Allocation towards growth capex would be ~USD2.5–3.0b over the next five
years; it has no plans for large inorganic growth.
Broad allocation of cash flow post normal working capital and maintenance
capex is targeted as follows: 1) growth capex: ~50%, 2) debt reduction: ~30%, 3)
shareholder returns: 8–10%, 4) balance to be retained in treasury.
Capex plan for Novelis
Auto finishing lines at Kentucky (200kt) and Changzhou (100kt) are expected to
be commissioned in 1HFY22. The combined capex stands at USD480m.
Rolling and casting capacity additions at Pinda (100kt) are expected to be
commissioned in 2HFY22. This entails capex of USD175m.
Recycling capacity additions at Greensboro (40kt) involving capex of USD35m
would be commissioned in 2HFY22.
The cold mill expansion at Zhenjiang (200kt) would involve capex of USD300m
and would be commissioned by 2HFY24.
Capex plan for Hindalco
Aluminum upstream – A 500kt capacity addition at Utkal would be
commissioned by 1HFY22. This would entail capex of USD200m.
Specialty alumina – A 70kt expansion with capex of USD40m is expected to be
commissioned in 2HFY24.
Aluminum – USD650m has been earmarked for capacity additions for finishing
assets (50kt; to be commissioned in 1HFY22) and extrusion (34kt; to be
commissioned in 2HFY23). On the other hand, capacities for FRP (to be
commissioned in 2HFY24) and recycling (to be commissioned in 2HFY25) are yet
to be decided.
Copper – USD200m has been earmarked for a 25kt/100kt/210kt capacity
addition for Inner Grove Tubes & Alloy Rod/recycling/Copper CCR, to be
commissioned in FY24.
USD2.6b deleveraging plans at Novelis
USD1.1b of the bridge loan would be repaid by end-FY21, of which USD500m
was already repaid in 3QFY21 and the balance would be paid in 4QFY21.
Short Term of USD900m was repaid in 2Q and 3QFY21.
Of a USD1.7b term loan due in 2022, USD1.1b would be refinanced and the
balance of USD600m would be repaid from the cash flows.
USD0.3b deleveraging plans at Hindalco
Of INR bonds of USD810m due in 2022, USD540m would be refinanced and the
balance of USD270m would be repaid in 2022.
23 February 2021
2
 Motilal Oswal Financial Services
Hindalco
Dividend policy
It would distribute a dividend in the range of 8–10% of Free Cash Flow at the
consolidated level (defined as Cash Flow after meeting interest, tax, other
statutory dues, maintenance capital expenditure, and working capital
requirements at the Consolidated Level, but before considering strategic capital
expenditure and debt repayments/pre-payments) of the relevant year.
Beverage Cans business outlook
1) Sustainable packaging preferences, 2) the shift from other substrates (such as
glass and steel) to aluminum cans, and 3) increasing demand for new beverage
types (such as sparkling water, spiked seltzer, canned cocktails, and energy
drinks) would drive long-term aluminum can sheet demand at a 3–5% CAGR
over the medium term.
In North America, Cans accounted for 67% of beverage packaging in CY19 v/s
30% in CY14. In Brazil, Cans accounted for 57% of beer packaging v/s 52% in
CY19.
Automotive business outlook
Aluminum automotive sheet global demand is expected to grow at a CAGR of
10% p.a over CY20–25.
Trucks & SUVs, with a growing share of the vehicle production mix in North
America (~75%), have rapidly recovered.
It currently represents 23% of the total aluminum pounds per vehicle; this is
expected to increase to 30% by 2030, driven by the continued replacement of
steel with aluminum on hang-on parts and BiW.
Specialties business outlook
Increased demand for sustainable products is driving shipments and innovation
in high recycled alloys.
With acquired assets, North America represents more than 50% of the global
Specialties portfolio, while demand is being driven by a strong Housing market
in the US.
Aerospace business outlook
It is seeing moderate recovery as demand has started picking up, led by multi-
year OEM order backlogs.
Novelis is well-positioned to capture long-term aircraft demand, predominantly
in the Asia-Pacific, which accounts for 41% of the global order book for aircraft.
Domestic business outlook
Domestic aluminum consumption is expected to double to 7.2mt by 2030,
driven by urban housing demand, a focus on electric vehicles, growth in
packaging demand, and demand from white goods.
Refined copper demand is expected to grow at 7–8% to 785kt over the next 8–
10 years from FY22E.
23 February 2021
3
 Motilal Oswal Financial Services
Hindalco
Exhibit 1: Snapshot of Novelis’ global operations
Source: Company
Exhibit 2: Aluminum automotive sheet demand to grow at 10% CAGR over CY19–26
Source: Company
Exhibit 3: Packaging trend for new beverages has shifted to cans in North America
Source: Company
23 February 2021
4
 Motilal Oswal Financial Services
Hindalco
Exhibit 4: Under-penetration in India’s aluminum demand from FRP and Extrusions provides opportunity for growth
Source: Company
Exhibit 5: Novelis’ capacity expansion timelines and capex outlay
Source: Company
Exhibit 6: Hindalco India’s capacity expansion timelines and capex outlay
Source: Company
23 February 2021
5
 Motilal Oswal Financial Services
Hindalco
Valuation and view
HNDL is our preferred non-ferrous pick owing to: a) its strong profitability in the
India Aluminum business from low-cost integrated operations (top quartile
globally), b) a positive outlook for Novelis, driven by recovery in auto demand
and cost synergies from Aleris, c) solid FCF generation, which should reduce
leverage sharply, and d) reasonable valuations.
Moreover, with ~75% EBITDA now coming from the non-LME business (Novelis),
we see relatively higher stability in HNDL’s earnings. We expect margins for the
Novelis business to remain strong over USD480/t.
While we expect aluminum prices to sustain on the back of demand recovery,
higher inventory could limit a further upside. We conservatively factor in
average LME of USD1,850/t in FY22 and FY23 – around 10% lower than spot. A
USD100/t change in aluminum prices impacts HNDL’s FY22E EPS by 11% and our
TP by 9%.
Even on our conservative LME aluminum assumption of USD1,850/t, the
valuation is attractive at 4.9x FY23 EV/EBITDA.
We value it at INR390/sh on FY23 EV/EBITDA (5x for India and 6x for Novelis)
and add the value of investments in the group companies at a 10% discount to
market price. Reiterate
Buy.
Exhibit 7: Target price derivation
INR m
India operations
Novelis
Enterprise value
Net debt
Equity value (a)
Investment in listed securities at 10% discount (b)
Target price (INR/share) (a+b)
Multiple
(x)
5.0
6.0
FY23E
EBITDA
55,657
148,774
EV
278,286
892,643
1,170,930
362,205
808,725
57,810
INR per
share
125
401
526
163
364
26
390
Source: MOSL
23 February 2021
6
 Motilal Oswal Financial Services
Hindalco
Story in charts
Exhibit 8: India Aluminum volume trend - In ‘000t
Exhibit 9: Aluminum EBITDA/t to remain strong
EBITDA/t (incl. Utkal margins)
570
481
1249
1278
1274
1290
1245
1301
1301
399
572
501
561
549
FY17
FY18
FY19
FY20
FY21E
FY22E
FY23E
FY17
FY18
FY19
FY20
FY21E
FY22E
FY23E
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 10: Novelis’ volumes rising with Aleris acquisition…
In ‘000t
3,578
3,188
3,274
3,273
3,875
4,012
Exhibit 11: …with an improving margin profile
EBITDA - USD m
418
441
Adj. EBITDA/t - USD
455
491
494
354
381
3,067
1,085
FY17
FY18
FY19
FY20
FY21E
FY22E
FY23E
FY17
1,215
FY18
1,368
FY19
1,443
FY20
1,625
FY21E
1,903
FY22E
1,984
FY23E
Exhibit 12: Net debt-to-EBITDA to decline to 2.3x in FY22E
Net-Debt (INR b)
3.7
2.9
465
401
2.5
388
2.8
396
3.2
526
2.3
454
Net-Debt/EBITDA
Exhibit 13: Return ratios to improve in FY22E
(%)
20.0
15.0
10.0
RoE
RoCE (pre-tax)
1.8
362
5.0
0.0
FY17
FY18
FY19
FY20
FY21E
FY22E
FY23E
FY17
FY18
FY19
FY20
FY21E FY22E FY23E
Source: MOFSL
Source: MOFSL
23 February 2021
7
 Motilal Oswal Financial Services
Hindalco
Financials and valuations
Consolidated Income Statement
Y/E March
Net sales
Change (%)
Total Expenses
EBITDA
% of Net Sales
Depn. and Amortization
EBIT
Net Interest
Other income
PBT before EO
EO income/(expense)
PBT after EO
Tax
Rate (%)
Reported PAT
Minority interests
Share of asso.
Adjusted PAT
Change (%)
Balance Sheet
Y/E March
Share Capital
Reserves
Net Worth
Minority Interest
Total Loans
Deferred Tax Liability
Capital Employed
Gross Block
Less: Accum. Deprn.
Net Fixed Assets
Goodwill
Capital WIP
Investments
Working capital Assets
Inventory
Account Receivables
Cash and Bank Balance
Others (incl. LT)
Working capital liability
Account Payables
Others (incl. LT)
Net Working Capital
Appl. of Funds
FY17
10,01,838
1.4
8,77,479
1,24,359
12.4
44,572
79,786
57,424
11,110
33,472
-76
33,395
14,326
42.9
19,069
-174
-251
19,069
-22.9
FY18
11,51,717
15.0
10,13,513
1,38,204
12.0
45,062
93,141
39,107
10,046
64,080
17,742
81,821
20,742
25.4
61,080
-1
-1,251
42,088
120.7
FY19
13,05,423
13.3
11,50,317
1,55,105
11.9
47,770
1,07,335
37,780
11,271
80,826
80,826
25,881
32.0
54,945
-7
5
54,957
30.6
FY20
11,81,440
-9.5
10,39,380
1,42,060
12.0
50,910
91,150
41,970
11,860
61,040
-1,840
59,200
21,570
36.4
37,630
40
38,884
-29.2
FY21E
12,81,262
8.4
11,15,771
1,65,491
12.9
65,708
99,783
41,640
15,508
73,650
-1730
71,920
22,420
31.2
49,501
40
51,271
31.9
FY22E
14,80,152
15.5
12,84,689
1,95,463
13.2
66,447
1,29,016
36,758
15,824
1,08,083
1,08,083
35,010
32.4
73,072
40
73,112
42.6
(INR m)
FY23E
15,36,529
3.8
13,32,098
2,04,431
13.3
67,612
1,36,820
33,577
16,252
1,19,495
1,19,495
37,475
31.4
82,020
40
82,060
12.2
(INR m)
FY23E
2,224
7,69,872
7,72,096
100
7,13,173
56,591
15,41,960
15,50,742
7,08,500
8,42,242
2,26,105
24,335
31,440
8,61,869
2,94,677
1,26,290
3,50,968
89,934
4,44,031
2,35,741
2,08,290
4,17,838
15,41,960
FY17
2,227
4,58,361
4,60,588
62
6,37,515
20,168
11,18,333
10,40,510
3,64,991
6,75,518
1,71,350
18,139
62,057
5,29,543
1,82,914
82,748
1,72,129
91,752
3,38,275
1,78,581
1,59,694
1,91,269
11,18,333
FY18
2,229
5,46,289
5,48,518
86
5,20,155
31,333
11,00,092
10,82,644
4,10,054
6,72,590
1,78,294
20,629
68,778
5,29,846
2,16,314
99,598
1,19,612
94,322
3,70,046
2,04,392
1,65,655
1,59,800
11,00,092
FY19
2,224
5,72,793
5,75,017
95
5,24,150
36,505
11,35,767
11,30,670
4,57,824
6,72,846
1,85,746
40,971
51,567
5,67,157
2,21,938
1,14,598
1,36,419
94,203
3,82,520
2,07,244
1,75,276
1,84,637
11,35,767
FY20
2,224
5,80,950
5,83,174
100
6,74,190
37,610
12,95,074
11,99,704
5,08,734
6,90,970
2,00,980
77,210
31,320
6,85,704
2,23,840
93,450
2,78,480
89,934
3,91,110
1,82,820
2,08,290
2,94,594
12,95,074
FY21E
2,224
6,26,710
6,28,934
100
7,86,781
42,094
14,57,909
14,44,968
5,74,442
8,70,526
2,26,105
33,453
31,360
7,01,331
2,45,722
1,05,309
2,60,367
89,934
4,04,867
1,96,577
2,08,290
2,96,464
14,57,909
FY22E
2,224
6,93,817
6,96,041
100
7,49,401
49,096
14,94,638
14,97,279
6,40,889
8,56,390
2,26,105
28,894
31,400
7,87,230
2,81,837
1,19,629
2,95,831
89,934
4,35,382
2,27,092
2,08,290
3,51,849
14,94,638
23 February 2021
8
 Motilal Oswal Financial Services
Hindalco
Financials and valuations
Ratios
Y/E March
Basic (INR)
EPS
Cash EPS
BV/Share (adj.)
DPS
Payout (%)
Valuation (x)
P/E
Cash P/E
P/BV
EV/Sales
EV/EBITDA
Dividend Yield (%)
Return Ratios (%)
EBITDA Margin (%)
Net Profit Margin (%)
RoE
RoCE (pre-tax)
RoIC (pre-tax)
Working Capital Ratios
Fixed Asset Turnover (x)
Asset Turnover (x)
Debtor (Days)
Inventory (Days)
Payable (Days)
Leverage Ratio (x)
Current Ratio
Interest Coverage Ratio
Debt/Equity
Cash Flow Statement
Y/E March
EBITDA
EO Expense/(income)
Tax paid
Change in WC
CF from Op. Activity
(Inc.)/Dec. in FA + CWIP
Free Cash Flow to firm
(Pur.)/Sale of Inv. and yield
Others and M&A
CF from Inv. Activity
Equity raised/(repaid)
Debt raised/(repaid)
Interest
Dividend (incl. tax)
CF from Fin. Activity
(Inc.)/Dec. in Cash
Add: Opening Balance
Closing Balance
FY17
8.6
28.6
129.9
1.1
15.0
FY18
18.9
47.6
166.1
1.4
8.7
FY19
24.7
46.2
175.0
1.2
5.7
FY20
17.5
39.8
171.8
1.2
8.0
18.1
7.9
1.8
0.9
7.7
0.4
12.4
1.9
7.1
8.2
9.1
1.0
0.9
30
67
65
1.6
1.4
1.6
12.0
3.7
12.8
9.3
10.8
1.1
1.0
32
69
65
1.4
2.4
1.1
11.9
4.2
14.5
10.6
11.9
1.2
1.1
32
62
58
1.5
2.8
1.0
12.0
3.3
10.1
8.5
10.3
1.0
0.9
29
69
56
1.8
2.2
1.0
FY21E
23.1
51.8
181.1
1.7
8.6
13.7
6.1
1.7
1.0
7.4
0.5
12.9
4.0
13.1
8.4
9.8
0.9
0.9
30
70
56
1.7
2.4
1.3
FY22E
32.9
62.7
211.3
2.7
9.6
8.7
4.5
1.3
0.7
5.6
0.9
13.2
4.9
16.8
9.8
11.4
1.0
1.0
30
70
56
1.8
3.5
1.0
FY23E
36.9
67.3
245.5
2.7
8.6
7.7
4.2
1.2
0.6
4.9
0.9
13.3
5.3
16.2
10.1
12.0
1.0
1.0
30
70
56
1.9
4.1
0.7
(INR m)
FY23E
2,04,431
-29,980
-10,851
1,63,600
-55,132
1,08,467
16,252
-38,880
-30,000
-33,577
-6,005
-69,582
55,138
2,95,831
3,50,968
FY17
1,24,359
3,622
-7,797
6,691
1,26,875
-29,376
97,499
5,667
3,524
-20,185
33,141
-25,430
-60,754
-2,479
-55,523
51,167
1,20,962
1,72,129
FY18
1,38,204
2,617
-14,081
-17,862
1,08,877
-30,008
78,870
24,685
8,052
2,730
162
-1,22,863
-38,486
-2,938
-1,64,124
-52,517
1,72,129
1,19,612
FY19
1,55,105
439
-18,883
-16,865
1,19,795
-60,053
59,742
6,615
5,110
-48,328
-1,176
-14,443
-35,813
-3,229
-54,660
16,807
1,19,612
1,36,419
FY20
1,42,060
-2,610
-1,020
-11,780
1,26,650
-67,910
58,740
7,110
10,111
-50,689
1,09,460
-40,160
-3,200
66,100
1,42,061
1,36,419
2,78,480
FY21E
1,65,491
-1,730
-17,936
-19,984
1,25,842
-50,132
75,709
15,508
-1,78,337
-2,12,962
1,14,427
-41,640
-3,781
69,007
-18,113
2,78,480
2,60,367
FY22E
1,95,463
-28,008
-19,921
1,47,535
-55,132
92,402
15,824
-39,308
-30,000
-36,758
-6,005
-72,763
35,464
2,60,367
2,95,831
23 February 2021
9
 Motilal Oswal Financial Services
Hindalco
NOTES
23 February 2021
10
 Motilal Oswal Financial Services
Hindalco
Explanation of Investment Rating
Investment Rating
BUY
SELL
NEUTRAL
UNDER REVIEW
NOT RATED
Expected return (over 12-month)
>=15%
< - 10%
< - 10 % to 15%
Rating may undergo a change
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 Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, 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. MOFSL is a subsidiary
company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are available on www.motilaloswal.com. MOFSL
(erstwhile Motilal Oswal Securities Limited - 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 Limited (MCX) and National Commodity & Derivatives Exchange Limited (NCDEX) for its
stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member
of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance
products.
Details
of
associate
entities
of
Motilal
Oswal
Financial
Services
Limited
are
available
on
the
website
at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL 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 MOFSL even though there might exist an inherent conflict of interest in
some of the stocks mentioned in the research report
MOFSL 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
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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 MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated from MOFSL 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 MOFSL & 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 Financial Services Limited (MOFSL) 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 MOFSL 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
MOFSL , 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., MOFSL 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
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such an institutional investor, such Singapore Person must immediately discontinue any use of this Report and inform MOCMSPL.
Specific Disclosures
1 MOFSL, 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 MOFSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOFSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOFSL, 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 MOFSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOFSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOFSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOFSL has not received any compensation or other benefits from third party in connection with the research report
10 MOFSL has not engaged in market making activity for the subject company
********************************************************************************************************************************
The associates of MOFSL 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
23 February 2021
11
 Motilal Oswal Financial Services
Hindalco
-
-
-
-
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 MOFSL 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 MOFSL 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 MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not consider
demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL 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 MOFSL 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 MOFSL. 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. MOFSL 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
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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. MOFSL, 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 MOFSL. 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
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locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to law, regulation or which would subject MOFSL 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 MOFSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not
to hold MOFSL or any of its affiliates or employees responsible for any such misuse and further agrees to hold MOFSL 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 71934200/ 022-71934263; Website
www.motilaloswal.com.CIN no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad(West), Mumbai-
400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst: INH000000412. AMFI:
ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration
No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth Management Ltd. (MOWML): PMS (Registration No.:
INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond,
NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. which is a group company of MOFSL. Private Equity is offered
through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL. Research & Advisory services is backed by proper research. Please read the Risk
Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no assurance or guarantee of the returns. Investment in securities market is subject to market risk,
read all the related documents carefully before investing. Details of Compliance Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* 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.
23 February 2021
12