[T.S.R:17932] Hindalco-Will It Deliver?

 

Hindalco's management maintains December 2011 completion for its

359ktpa aluminium project at Mahan. Post the site visit, we see a

momentum in project execution, but still expect a delay of two more

quarters. Our estimates factor in such delays, hence we do not expect any

further negative surprises. The existing 340ktpa aluminium plant at

Renukoot is in `steady state' mode, enjoying advantages of captive

bauxite, captive power, linkage coal and portfolio of downstream

products which enable USD 700/t premium.

 

Management pegs December 11 for Mahan project operations

The management expects the smelter to start with ~11% of capacity between Dec

‐11

(first pot) and Mar‐12 while the guidance for FY13 production is at 200kt. However, we

maintain our assumptions at ‐ Sep‐12 for the start and 90kt as the output for FY13.

 

Coal sourcing remains a challenge till captive coal starts

The company continues to expect a successful resolution to 'no

‐go' issues at Mahan

coal block. Nevertheless, until the start of the captive coal, the company will have to

source coal through a mix of e‐auction, tapering linkage and washery rejects.

 

Utkal alumina start maintained at Sep

‐12

The management maintains that the Utkal alumina project operations would

commence by June

‐Sep‐12 period, until which, the excess alumina of 0.17mtpa from

existing operations could be used by Mahan plant.

 

 

 

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

 

Nothing in this article is, or should be construed as, investment advice.

 

 

 

 

 

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