MOSL: Morning India (31/May/17)-1. Auto Sales Estimates; 2. M&M; 3. Hindalco Inds.; 4. United Spirits; 5. Power Grid; 6. BPCL; 7. Britannia Inds.
​MOrning India (31/May/17): 1. Auto Sales Estimates; 2. M&M; 3. Hindalco Inds.; 4. United Spirits; 5. Power Grid; 6. BPCL; 7. Britannia Inds.; 8. Aurobindo Pharma; 9. Oil India; 10. Ramco Cement
Today’s top research idea
Hindalco Inds: Copper business drives strong performance; Net debt to EBITDA at ~3x, deleveraging remains focus; Reiterate Buy
-Hindalco’s (HNDL) Net Debt to EBITDA has declined from ~5x in FY16 to ~3x in FY17. Supportive LME, improving mix at Novelis, favorable cost positioning and minimal sustenance capex will drive strong FCF generation and further deleveraging.
-HNDL has a strong business model with full integration from mining to high end value added aluminum products for automobiles and beverage cans. Most (~75%) of USD2b operating EBITDA comes from conversion businesses (Novelis, Copper TcRc) and special grade alumina. Relative cost positioning of primarily aluminum business has improved (11th percentile) on improving integrated supply and coal availability. The outlook on LME is better as China implements stricter environment norms. We value HNDL at 6.5x FY18E EV/EBITDA at INR250/sh (at LME of USD1,750/t and USDINR68.3). Buy.
Piping hot news
Cadila Healthcare plans to raise Rs1,000 crore via QIP
Drug maker Cadila Healthcare Ltd is in talks to raise around Rs1,000 crore through a qualified institutional placement (QIP) of shares, three people aware of the development said.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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