Motilal Oswal - MOSL: Morning India (18/September/17)-1. Hindalco 2. Glenmark Pharma (ART) 3. Technology 4. EcoScope

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Motilal Oswal

Team Research

MOSL: Morning India (18/September/17)-1. Hindalco 2. Glenmark Pharma (ART) 3. Technology 4. EcoScope

â€‹MOrning India (18/September/17): 1. Hindalco; 2. Glenmark Pharma (ART); 3. Technology; 4. EcoScope

Todayâ€™s top research idea

Hindalco Industries: De-risked businesses delivering strong free cash flows

Hindalcoâ€™s business is robust and de-risked. Novelis and copper segments operate on conversion model, with LME being a pass-through.

These two businesses account for more than 60% of EBITDA, and provide steady cash flows and support balance sheet. Aluminum smelting is a high margin business; volatility is correlated to metal cycle.

There is merit in hedging aluminum production, as it helps tide over volatility in LME and provides net gains because forwards curves have always been in contango.

We remain bullish on the stock due to (a) strong business fundamentals, (b) free cash flow generation, and (c) the managementsâ€™ focus on deleveraging, high IRR projects, and attractively-valued inorganic opportunities. We re-iterate BUY, with a target price of INR310/share

Piping hot news

BPCL eyes government stake in GAIL India for Rs18,000-20,000 crore

â€‹State-run Bharat Petroleum Corp. Ltd (BPCL) is in talks with the countryâ€™s largest natural gas transporter GAIL (India) Ltd to acquire the governmentâ€™s majority stake in it for Rs18,000-20,000 crore.

18/09/2017 20 EN

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MOSL: Morning India (18/September/17)-1. Hindalco 2. Glenmark Pharma (ART) 3. Technology 4. EcoScope

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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