Hindalco - Capex to peak out in FY13 - Motilal Oswal

Most negatives priced in; 70% cash flows insulated from LME

- Hindalco remains focused on capex in various greenfield projects despite low IRR at current LME.

- Annual capex is expected to peak in FY13 with INR90b on Indian projects and USD600-700m at Novelis.

- Expect Mahan to start production in December 2012 with 40 pots, and FY14 metal production target of 140kt. Utkal Alumina refinery is expected to start in 1QFY14.

- VALUATION & VIEW: We believe Hindalco's current valuations factor in most negatives; conversion business provides 70% of operating cash flows and is fairly insulated from LME volatility. Maintain Buy with SOTP-based target price of INR161.

Source : Equity Bulls

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