Investor Presentation Sep2010

8/14/2019 Investor Presentation Sep2010

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An Industry Leader in Aluminium & Copper

September 2010

Hindalco Industries LimitedInvestor Presentation


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Our VisionStrategy to build upstreamand buy downstream

ABG aspires to be in the Fortune200 with a $65bn turnover by

FY15 and Hindalco expected tobe the torchbearer..

Towards a new Hindalco

To be a premiummetals major, Global

in size and reach, excellingin everything we do, andcreating value for its

stakeholders


4/46

4Hindalco Industries Limited: Investor Presentation

Hindalco : A promise delivered through stellar performance

Stronger NovelisStronger Novelis

Paradigm shift in focus from volume driven to EBITDA drivenHigher premiums and permanent cost cu tsWell posi tioned in emerging markets with strong growthfundamentalsOne of the worlds largest recyclers of aluminium reduces costsand enables signf icant reduction in energy consumption

Signficant market share in FRP with strong global market out look

From turnaroundto outperformer-

EBITDA ofUS$1bn

From turnaroundto outperformer-

EBITDA ofUS$1bn

Existing IndianOperations

Existing IndianOperations

Asset sweat ing, Brownfield expansion on tr ackExploiting low cost baseIncreasing mix of VAP and domestic salesDominant market share

Better

profitabilityamongst peers

Betterprofitability

amongst peers

Focus ondeliveringexpansion plans

Focus ondeliveringexpansion plans

Well timed capacity increases expected to be in the global bestquartile for manufacturing costsSignificant progress achieved reinforcing timely deliverycapabilities

Ensures fullcoverage acrossthe value chain

Ensures fullcoverage acrossthe value chain


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1. Novelis : Successful Turnaround Story


6/46


Key themes

Industry: Improved aluminiumsector fundamentals with apositive demand outlook

Novelis turnaround: Dual benefit of

pricing power and cost cutting,coupled with strong liquidity

Way forward for Novelis:

On the threshold of robustgrowth IIII

II


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Global Economies : Showing on the road to recovery

Major emerging economies such as China and Indiahave rebounded strongly f rom global downturn

7 . 9

6 . 0

2 . 4

1 . 4

1 0

. 3

9 . 3

( 5 . 3

)

( 0 . 7 )

US Europe China India

Q209 Q309 Q409 Q110 Q210

Global economic recovery continues YOY % GDP growth rate from Q2 2009 to Q2 2010

(%)

Q2 2010 growth rates for Europe and India are estimates

with improved sector outlook

(CY09-14)

4-8% 8-10% >10% 8%

4%

4%

7%

6%10%>10%3-5%

2-3%

6%

7%

10%

4-6%

10%

>15% 8-10% 0 %

As ia

N. America

Europe

S. America

Global

Can Sheet Automotive Industrial/Electronics

Overall demand

I


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Novelis Turnaround in operations

Uptick in volumes...

Turnaround driven by a number of cost cutting initiatives

Restructuring globally across the Company to reduce labour and overhead costs through capacity and staff reductions

Reduced manpower by 11%

Annual cost savings of US$140m achieved ahead of schedule

Transfer of production facilities to low-cost regions relocation of Rogerstone facility to Hirakud

Proactive risk management for commodity pricing, foreign exchange and interest rate risks

746756

632 605 650693

649

716

263

231199200

124

5388

127

500

550

600

650

700

750

800

Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY110

50

100

150

200

250

300Shipm ents (k t) Adjus ted EBITDA (US$m n)

116 201 88 191 289 307 323 353

Adjusted EBITDA/ton (US$)

II


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Novelis Convergence of Adj. EBITDA and EBITDA

Over time, Novelis has witnessed a gradual convergence between EBITDA and adjusted EBITDA

213

(124)

(1,868)

214 413 434

264

164

263231

199

200124

5388127

(2,000)

(1,500)

(1,000)

(500)

0

500

Q2FY09 Q3FY09 Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11

EBITDA (US$mn) Adjusted EBITDA (US$mn)

II

Novelis strong r isk management practices combined with thetermination of certain ceiling contracts have led to a gradual

convergence of EBITDA and adjusted EBITDA numbers


10/46


Novelis shipments sustained improvement across markets

Automotive

Industrial

Cans

Automotive

Industrial

Cans

Automotive

Industrial

Cans

Automotive

Industrial

Cans

North America Europe

South America Asia

246 254 258 243274 278

Q4 Q1 Q2 Q3 Q4 Q1

II

1018999755737

Q4 Q1 Q2 Q3 Q4 Q1

188 185203 188

227 232

Q4 Q1 Q2 Q3 Q4 Q1

889460603315

Q4 Q1 Q2 Q3 Q4 Q1

Shipments (kt)

Segment income (US$mn)

85 81

9384

86 90

Q4 Q1 Q2 Q3 Q4 Q1

49382636119

Q4 Q1 Q2 Q3 Q4 Q1

86130 139 134 129 146

Q4 Q1 Q2 Q3 Q4 Q1

4441394838

3

Q4 Q1 Q2 Q3 Q4 Q1

Shipments (kt)


Shipments (kt)


Shipments (kt)

Segment i ncome (US$mn)

Current trend in Aluminium demand Novelis Shipments Novelis Segment Income


11/46


Global Leader in Aluminium Recycling

Novelis is one of the worlds largestrecyclers of aluminium

9 plants on 4 continents

Aluminium recycling only requires 5% ofenergy used to produce primary aluminium

Aluminium recycling avoids 95% of GHGemissions of primary aluminium smelting

Novelis recycled 40 billion cans in FY2009 Reduced the need for primary aluminium

by 530,000 metric tons

Saved 73 million MMBTUS

Avoided 5 million tonnes of GHGemissions

Recycling drives low cost posi tion; pos itions the cans as environmentally preferred package

II


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Sustained turnaround with strong liquidity

Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY11

Cash and cash equivalents Availabili ty under the ABL facility

$446$555

$634

$1,026 $1,051

Strong liquidity (Mn)

Strong liquidity: Now focuses on strategic capital allocation decisionExcess cash may be utilized by Novelis towards future capex (the Company recently announced PindaProject in Brazil)

On its way to fuel Greater Hindalco growth

Visibly sustained turnaround i n Operating and Financial Performance

649

746716

693650

756

632 605

263231

199

88

200

12453

127

500

600

700

800

Q2FY09 Q3FY09 Q4FY09 Q1F10 Q2FY10 Q3FY10 Q4FY10 Q1FY11

0

100

200

300

400

FRP Shipments (LHS) Adjusted EBITDA (RHS)

F R P S h i p m e n

t s ( k t )

41 44 43 40 41 41 3642

Interest, net (US$ mn)

A d j u s t e d E B I T DA

( U S $ mn

)

II


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Novelis today III

High end products focusContinues to build on itsstrong market position in FRPMajority of product portfoliocomprised of premiumproductsMarket leader in can recyclingwith strong technology focus

Inventory controlSignificant reduction ininventory through effectivesupply chain management

Worldwide assets and expertise provide unique capabilities to regional/ global customers

1

2

34

5

6

De-risked business modelSimple converter business(LME pass through)

Well Balanced geographic mixOver 33% revenues fromemerging markets

Effective Risk ManagementStrong controls and systems inplace to reduce volatility

Cost initiativesRelocation of facilities tolow-cost regionsGreater application ofNovelis technology forglobal projects

Novelis initi atives and multi -pronged strategy have successfully enabled it to turnaround operations


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Novelis going forward III

Novelis is on the threshold o f robus t growth, with plans to exceed $1B of Adjusted EBITDA per annum going forward

One Novelis Drive Efficiencies andReduce Costs

Expand and further consolidateleadership position

Build on Novelis focusedbusiness model to become afully integrated global company

Strategic &Opportunistic Investments

Reduce overall cost base andimprove manufacturingefficiency

Leverage and streamlineprocurement

Standardize financial and ITplatforms

Greater application of Novelistechnology for global projects(such as Tata Motors)

Governed by operatingefficiency gains and IRR hurdlerates

Explore potential opportunitiesand identify optimum option fordeployment of excess cashreserves

Achieve plant optimization indeveloped markets

Emerging markets andbrownfield expansion focus

Pinda Project in Brazil


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Strong Outlook for FRP ProductsFRP growth worldwide from 2010 to 2015 (kt)

967222

343639

3383,088

16,493

22,090

10,000

12,000

14,000

16,000

18,000

20,000

22,000

24,000

2010 Asia MENA West. Europe East. Europe S. America N. America 2015

Areas of focus

III

Focusing capex on growing economies; Europe & N.A to return to pre-recession levels


16/46


Novelis continues to be strong player in global can business

Beverage can portfolio Immune toeconomic downturn~58% can body stockRecycling Go Green initiativeNovelis bought over 40bn cans in FY10

Novelis Dominant player in global can business

FY09 Can shipments 1,557 KT

FY10 Can shipments 1,580 KT

Advantages of the Can

Cans have considerable advantages over bottles inall relevant areas for retail and industry

Branding Freshness

Variety Logistics

16%

3%6%

4%

17%

45%9%Beverage cans Fo il & Packaging

Industrial Transport

Constructi on Li thography

Others

10%

2%4%

8%

15%

54%

7%Beverage cans Fo il & Packaging

Industrial Transport

Constructi on Li thography

Others

Steady increase in contr ibution by beverage can segment

FY08

FY10

III


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2. Continued impressive performance ofIndian operations


18/46


Key themes

II

Industry : Improved Domesticaluminium sector fundamentalswith a positive demand outlook

Focused growth of Indian

operations All roundimprovement in Al

Copper business: Steadymargins despite decline in TcRcrates, with good by-productrealizations; situationexpected to improve I

III

II


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Hindalco at the forefront of the explosive growth in India

Large scope formetal consumptionto rise from currentlevels

End user segmentshave astrong/positiveoutlook i.e. Power,Transport,Construction,Industrial etc

Rising per capitaconsumption of Alin India

Strong metal sectorgrowth Alconsumption andCu consumption

India: Strong growth in end user industries

390

435

FY10 Q1 FY11 Q1

11.5%

Aluminium consumpt ion (k t)

Copper consumption (kt)

3.8%

160

166

FY10 Q1 FY11 Q1

Electrical & Electronics

Building & Construction

Consumer Durable

Automobile & Transport

Industrial Machinery

Packaging

I

Insulated from global pressures due to exposure to Power sector in India accounts for c.48% of aluminium usage in India


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Indian Al operations robust growth prospects

Alumina (kt ) Metal (kt)

Higher alumina and metal production on he back of Brownfield expansions increased volumes of downstream value added produc ts

Wire rod (kt) FRP (kt) Extrusions (kt)

1,237

1,307

FY09 FY10

6 %

523

555

FY09 FY10

6 %

75

92

FY09 FY10

2 3 %

182

205

FY09 FY10

1 3 %

36

39

FY09 FY10

8 %

II


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Cost contro l init iatives launched proactively ahead of the global

downturn have helpedThe Company has been able to maximize produc tion output atHirakud, which has access to captive coal

Costs to reduce further as Greenfield projects come on stream

Hindalco: Low cost positionHindalco Aluminium smelters are in the best quarti le (25 th percentile)

on cost Further set to benefit from Hirakud Cost Advantage

Hindalcos Indian aluminium operations ranked amongs t the lowest cost producers of aluminium globally

0

500

1,000

1,500

2,000

2,500

3,000

1% 25% 41% 52% 63% 75% 85% 94% 100%

Hirakud Business Operating Costs

Renukoot Business Operating Costs

% of World Production

Site Operating Cash Cost Curve

100

94

FY09 FY10

Aluminium conversion cost (Rs/t , Indexed)

29.0

28.0

28.5

27.0

70758085

9095

100105110115120

FY10Q1 FY10Q2 FY10Q3 FY10Q426.0

26.527.0

27.5

28.0

28.5

29.0

29.5

95

102

100

114

86

107

110

84

102 99

104

86

Hirakud

Renukoot

Hirakud sharein outp ut (%)

Overall

US$/ t

II

The only smelter which uses captivecoal and power


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VAP to drive margins

Hindalco expects to increase VAP going forward and maintain its dominant market share going forward

Healthier produc t-mix and geographic mix (kt)

60% 57 %

43%40%

FY09 FY10

VAP

Primary

6%521 555

82%69%

18%31%

FY09 FY10

Exports

Domestic

521 555

VAP sales: One of the key drivers for Hindalcos salesin IndiaKey brands commanding significant market share; has53% market share in domestic Rolled Products sales*Increasing downstream applications in India; Hindalcoswell balanced product portfolio would consolidatemarket leader positionHigh margins further enhanced with duty protection

VAP: Key driver for Hindalcos downstream operations

Key Brands

Hindalcos downstream products command market premium with significant market share in India

II

Hindalco has a dominant market share in FRP


23/46


Al Railway Wagon in India

New initiatives undertaken by Hindalco

Hindalco has pioneered new range of futuri stic value added product range with a potential to improve margins

II

Development of Aluminium hoods & roof

Al . Swing Arm

Aluminisation in Automotives

Al Roofing 's for Cons truction Al Bicycle Frames

Al Boats


24/46


Hindalco: Long on Alumina

Chinas dependence is posi tive for Hindalcos long alumina position

II

Contract alumina prices up from 12-12.5% of LMEhistorically to 13-13.5% in 2009 and to 14-15% in 2010

8.1 10.8

16.4 16

2.3

18

1980 1990 2000 2010

ROW China

China increasingly dependent on ROW for itsalumina requirement

Rising Alumina cost further adds to Chinesecosts

Global Alumina Third Party Market (mn tons )

Alumina Aluminium

1.5 0.6

Hindalco 2010: IntegratedUpstream Operations

mtpa

Upstream

Alumina Aluminium

3.0 1.4

Upstream

Hindalco 2012: IntegratedGlobal Upstream Operations

Going forward Hindalco will be long in Alumina

Delinking of Alumina prices from the LME and introduction of spot price would benefit Hindalcos long alumina position


25/46


A cost effective Upstreaming strategyMining acquisitionStrategic alliances/partnership

Long Term feedstocksecuritisation

By-Products value extractionValue added downstreaming

Value Chain Enhancement

Global ScaleTop Quartile Cost Curve

Global Cost Competitiveness

Jetty /port infrastructure to overcome locational disadvantageSourcing Mix optimisationRegional redistribution points

Service level differentiationQuality edge

Cost effective brown field expansionStrategic advantage through technology

Asset sweating

Drivers

Leadership in domestic marketoffering better realisation

Supply Chain Reengineering

Capital Efficiency

Key focus areas

Steps taken by Hindalco to strengthen copper business III

1

2

3

4

5

6

Transforming the copper business into a globally competitive smelting value chain


26/46


999

182 333

1,043

170 298

DAP (kt) Cathode (kt) Sulfuric Acid (kt)

FY09 FY10

Copper Operations - Good performance despite tough market conditions

Sustained improvement in key parameters likerecovery and energy consumpt ionEnergy-mix : more usage of petcoke and LNGRatio of VAP to cathode product ion up from37% to 53%DAP production increased significantly

1 2 %

Cathode (kt)

Copper Cathode cos t w/o any credits (c/lb, indexed)

10073

FY09 FY10

4 % 7 %56,450

49,600

FY09 FY10

14%

Overall production down 19% to 57kt due toconscious idling of Mt. Gordon

Nifty production (tons)

448

166

72

(89)

440

(60)

Sales (US$mn) EBIDTA (US$mn) PAT (US$mn)

FY09 FY10

Performance at ABML (US$mn)

III


27/46


Strong financial performance (standalone)

68

181132 163

182 196

820 847

1,0691,155

1,1751,126

1,401

1,530

1,836

2,037

2,1992,122

(100)

100

300

500

700

900

1,100

1,300

1,500

Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY110

500

1,000

1,500

2,000

2,500Sales (US$mn) EBITDA (US$mn) LME pr ices (US$)

8% 21% 12% 14% 15%

EBIDTA Margin (%)

Exchange Rate: US$1: INR46

17%


28/46

3. Expansion Projects : Aggressively focused ondelivery with calibrated financial closure on course


29/46


Robust project pipeline backbone to deliver growth future growth

Total land requirement of c .4,000 acres for the project. Application foracquisiti on of pr ivate land has been submi ttedWater drawl clearance received for 55 MCM and DFR is complete

US$ 2,174 mnQ1 FY14Jharkhand Aluminium

c.1,387 Acres of land registered in name of company, process for balance land is in progressWater drawl agreement to draw upto10.42 cusecs obtainedUS$ 1,304 mnQ1 FY14 Aditya Refinery

Q2FY12

Q3FY12

Q2FY12

Timing ExpectedCompletion

US$ 1,217 mn

US$ 2,000 mn

US$ 2,000 mn

Project Cost (US$mn)

Detailed Engg-59% Complete for smelter & 25 % complete for CPPMajor approvals received. Forest land stage I clearance received.Permission to start project sit e consolidation activiti es received. StageII clearance is progressing

Aditya Aluminium

Basic Engg-100 % Complete, Detailed Engg-92% Completed Al l s tatutory clearances have been obtainedMore than 5000 people working at site. Major Contractors like L & T,Simplex, GDC mobil ized ful ly at si te

Utkal Alumina

Basic Engg-94 % Complete, Detailed Engg-60% CompleteMajor approvals in placeOrders for all major, long delivery equipment placedMore than 10,000 people at site. Major Contractors like L&T, BHEL,

Rohan Builders etc have been mobi lized fully

Mahan Aluminium

CommentsProject



30/46


Update on Project : Greenfield

% committed

6,578 acres3,328 acres3,750 acresLand spr ead

Q2FY12Q3FY12Q2FY12Expected

Completion

Capex ramp up(US$mn)

US$ 1,217 mnUS$ 2,000 mnUS$ 2,000 mnProject Cost(US$mn)

1,500 ktpa359 ktpa smelter 900MW power plant

359 ktpa smelter 900MW power plant

Scope

RefinerySmelter Smelter Nature

Mahan aluminium, MadhyaPradesh Aditya aluminium, Ori ssa Utkal alumina, Oris sa

57%83%

%committedat time of

QIP

%committed

current

49% 66%

%committedat tim e of

QIP

%committed

current

66% 82%

%commit tedat tim e of

QIP

%commit ted

current

370522

28344

2010 2011 2012 2013

217

924

522300

2010 2011 2012 2013

109

630870

337

2010 2011 2012 2013

Key Benefits

Well timedcapacity increase

Lower ProductionCost

Lower CapexCost ( on a per

ton basis)

Raw MaterialCoverage

GreaterIntegration


f


31/46


Progress of Key Projects

Basic Engineering 100% and DetailedEngineering 92% completed

Statutory approvals obtained

Site progress c.5,000 people workingat site; major contractors h ave beenmobilized; 87% of Piling w orkcompleted; RCC, structuralfabrication 33% complete; Tankageserection under progress

Power plant Erection of BTG units

under progressFinancial closure achieved -Syndication launched for US$1,087mnagainst which a response received forc. US$2,391mn and Documentationcompleted

Utkal Alumin a

Basic Engineering 94% andDetailed Engineering 60%completed

Statutory approvals majorapprovals in place

Site progress c.10,000 peopleworking at site;

Smelter - Site Grading 55%complete; structural - underprogress

Power plant 5 boiler units, 4 ESPunits, 2 power units co mpleted,First chimney 88 m compl eted,second chimney 40 m completed

Financing - DFR completed,preliminary discussion w ith banksfor financing has commenced andBanks are willing t o underwrite

entire fund requirement

Mahan Alum in ium

Detailed Engineering 59% completedfor sm elter and 25% complete for CPP

Statutory approvals major approvalsin place - Forest land stage I clearancereceived.

Site progress c.10,000 peopleworking at site;

Smelter - Site Grading 65% complete;structural - under progress. R & Rhouses-30 % houses completed

Financing - DFR completed, financingbeing launched shortly

Aditya Alumin iu m

Bauxite Mine &Refinery


U d P j B fi ld


32/46


Update on Project : Brownfield

Nature and Scope Expansion of the VAP facility to 600 ktpa. The expansion is expected to cost c.$300mProgress recently conceivedProject Schedule - To be completed by Q3FY13

Pinda, Brazil

Nature and Scope Transfer of Novelis UK can factory to IndiaProgress - 98 % dismantling completed. Containers are being dispatched and some have arrived in India. Cold andHot Mill orders placed with vendors (Achenbach and ABB). Site office developed for project team. Site Grading andBoundary Wall Construct ion in progress. 165 persons working at site.Project Schedule To be completed by Q2FY12

FRP, Hirakud,

Orissa

Smelter Expansion - Capacity increase from 161 to 213 KTPA through addit ion of 80 Pots of 235 kA. The plan is toexpand the capacity to 360 KTPower Plant Expansion - Capacity to i ncrease to 467.5 MW by addition of 100 MWProgress - DCPL has been engaged as the EPCM consultant . Basic Engineering by GAMI-LOT A & B Basic

Engineering documents recd. 3rdLot also in f inal stage. Orders placed for 100 MW turbine/generator and boilers.Enquiries for FTP, Recti fier s tation, PTM have been floated. Orders to be placed by end August. Site grading 80 %completed.Project Schedule - 30 pots to be commiss ioned by Dec2011 & balance 50 pots by Mar2012.

Hirakud,

Orissa

HIRAKUD, ORISSAHIRAKUD, ORISSA PINDA, BRAZIL

P j C i l di d fi i d


33/46


Project Capital expenditure and financing need

391

1,217

2,000

2,000

5,217

3,652

1,174

0

1,000

2,000

3,000

4,000

5,000

6,000

Utkal Alumina Mahan Aluminium Aditya Aluminium Total Project Finance Equity contribution

Project spending for key pro jects (US$mn)

70%

Exchange Rate: US$:INR 1:46

Alreadyspent

Treasury

Post the successful QIP transaction, Hindalco is well positioned to raise additional debt for its planned projects Hindalco has overUS$1 bn in Treasury


34/46

Impressive financial performance with upwardmomentum in profitability

St g fi i l f ( lid t d*)


35/46


Strong financial performance (consolidated*)

121305 332 362 413

459

2,759 2,807

3,250 3,267

3,595 3,6591,401

1,530

1,836

2,037

2,1992,122

0

1,000

2,000

3,000

4,000

5,000

6,000

Q4FY09 Q1FY10 Q2FY10 Q3FY10 Q4FY10 Q1FY110

500

1,000

1,500

2,000

2,500Sales (US$mn) EBITDA (US$mn) LME pr ices (US$)

4.4% 10.9% 10.2% 11.1% 11.5%

EBIDTA Margin (%)


12.5%

* Consolidated: comprises Hindalco standalone and Novelis results

Debt Position (Consolidated)


36/46


Debt Position (Consolidated)

* Hindalco Repayment Schedule includes Hindalco Standalone Debt consisting of secured loans & unsecured foreign currency loan and Novelis Loan Recourse; does not include working capital loansExchange Rate : US$1: INR 46

1011

354 3041418

61173 234 448

763540

1,000

2,000

3,000

Debt (30 Jun 2010) 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Secured Loan Novelis Loan Recourse

2,631

2416 16

2,414

16145

0

1,000

2,000

3,000

Debt (30 June 2010) Within 1 yr 2 years 3 years 4 years 5 years After 5 years

U S $ i n m n

Repayment schedule

U S $ i n m n

Novelis

Hindalco

Over 90% of debt back-ended

Repayment schedule*

Repayment of Novelis loan commences in FY12


37/46

Favourable Market Outlook

Robust world consumption for Al post rebound in 2010


38/46



2010E Consumption

Sustained robust demand for Aluminium over the next few years

Projected primary aluminium consumption by region (in MMT)

China

Europe

North America

Asia w/o China,India and Russia

Latin AmericaIndia

RussiaRest of World

14.0%

2%

0%

12%

7%

-13%

-19%

-25%

16%

6%

7%

14%

6%

9%

8%

7%

15%

3.4%

3.6%

4.6%

3.1%

4.7%

4.2%

0.4%2009 Actual2010 Forecast2011E

2009 Global demandgrowth rate: -4%

2010 Global demandgrowth rate: 11%(2010 ex-China: 8%)

2011 Global demandgrowth rate: 8%(2011 ex-China: 4%)

China

Europe

North America

Asia w /o China,India and Russia

Latin America

India

Russia

Rest of World

Source: Industry Reports



39/46


50

100

150

200

Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10

1 yr contango Storage + Financing cost


Positive Outlook for Aluminium to continue with China and India aluminium demand consumption to outpace production

21,434 23,148

25,000

20,87919,306

12,84615,025 16,115

17,60018,934

16,60514,446

2009 2010E 2011E 2012E 2013E 2014E

Production ConsumptionChina India

1,588 1,5971,439

1,563 1,636 1,712 1,755 1,798

1,5501,5031,304

1,473

2009 2010E 2011E 2012E 2013E 2014E

Production Consumption

Regional Premiums close to all time highs due to paucity ofaluminium in the physical markets One year contango still higher t han storage costs (US$/T)

Source: Industry reports

Contango flat for last one year

0%

100%

200%

300%400%

500%

May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10

Midw est Japan Europe

China was a net exporter of aluminium in June 2010 forthe first time since 2008 produc tion was at record levels


Source: Industry reports Source: Industry reports

Drivers for consumption growth in India in place


40/46


Drivers for consumption growth in India in place

Industrial7%

Others17%

Power

48%

Transportation15%

onstruction13%

Robust growth outlook

Consumption by various industry segments

to continue to drive Aluminium consumption

Source: Aluminium Association of India


is expected to continue showing robus t demand

Generation capacity to increase by 68,869 MW in 2007-12 Privatization of electricity T&D and emphasis on

improving existing infrastructure to strengthen domesticaluminium demand

Increased use of aluminium in automobile and two-wheelermanufacturing to further bolster domestic demand

Underpenetration in India also augurs well for future demand Per capita consumption 1.1 kg in 2009 as compared 10-

25 kg in developed European countries and USA

1.08 1.21 1.28

1.451.68

1.852.07

0.86 0.96

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

2 0 1 0 E

2 0 1 1 E

2 0 1 2 E

2 0 1 3 E

2 0 1 4 E

9.0

6.7 7.28.4

9.99.47.5

0

4

8

12

FY05 FY06 FY07 FY08 FY09 FY10 FY11

Source: Office of Economic Advisor (India), IMF, Industry reports

Industrial Production growth (%)GDP growth (%)

8.4 8.2 11.6 8.5 2.8 10.4 9.4

Favorable Demand outlook: Reflected in Al forward prices


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Favorable Demand outlook: Reflected in Al forward prices

2,000

2,050

2,100

2,150

2,200

2,250

2,300

Sep-10 Dec-11 Mar-13 Jun-14 Sep-15

Last Price

1.6%

-0.9%

-13.6%-13.0%

12.0%

Alum ini um Copper Nickel Lead Zinc

Source: Bloomberg (August 2010)

Aluminium forward price curve (US$/t) Steadily r is ing 5 year forward curve price change (Sept 2010- Nov 2015)

Aluminium continues to be the only major non-ferrous metal wi th a double dig it forward pr ice growth (over a 5-year time horizon)

Recovery of US/ European markets and continued robust growth in Asia/ Latin America; China to witness acceleration phase in demand for

AluminiumReduced production capacity, declining global aluminum inventories growing tightness in prime and value added productsLaunch of physical backed Aluminum Exchange Traded Funds (ETF)Wider application of Aluminum, especially in Auto and Industrial segments

Key Drivers for Aluminium Prices

Source: Bloomberg (August 2010)


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Re-rating due to visibility of growth andfocused strategy in place

Well defined Growth drivers for Hindalco


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Well defined Growth drivers for Hindalco

Alumina Greenfield Projects Value Added Products

Long on Alumina - from 1.5 mtpacurrently to 3 mtpa in the future

Amongst the largest producers ofSpecialty Alumina (expandingcapacity to 350 kta) globally with a90% domestic market share in India

JV in Cameroon in place to minebauxite and set up alumina refinery

Greenfield projects expected to bein global best quartile formanufacturing costs

Scalability of Greenfield projects toprovide uptick in margins in thefuture

Strong EBITDA profile for newprojects to improve growthfundamentals and capital structure

Expansion of the Pinda projectwould increase emerging marketexposure to over c.40%

Expects to increase mix of VAP andintroduce futuris tic value addedproducts to provide further upsidesto revenues and margins

To deliver high end products inHirakud (Project Blue Fox)

Hindalco Today

Revenue (FY10) USD12.9bn

EBITDA (FY10) USD1.4bn

Hindalco Tomorrow

ABG aspires to be a $65bnturnover by FY15 andHindalco expected to bethe torchbearer..

Towards Sustainable Leadership


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owa ds Susta ab e eade s p

Domestic operations Expansion Projects Novelis

Driver

User industries of aluminum have abullish outlookRobust sector fundamentalsLong on AluminaIntroduction of new futuristic valueadded products (Al)

New avenues for copper use

Financial closure on track for keyGreenfield projectsGreenfield projects expected to bein global best quartile formanufacturing costsInfrastructure available for furtherscalability in the futureBrownfield capacity increaseadvantage

Improving product mix to drivemargins and growthSuccessful relocation of RogerStoneConvergence of EBITDA and

Adjusted EBITDALeader in Al Recycling

Highlights

Strategy

Sustainable growth Achieve potential Stabili ze and transform

Strong risk management practicesin placeLeading market share in VAP

Continued focus on operationalexcellence for both Aluminum andCopper Low cost base and robust de-risked business model

Focus on timely delivery ofplanned projectsMaintain high quality of execution

Greenfield projects will furthersharpen the competitivepositioningLow capex cost per ton wi th bestin class operating capacities

Financial turnaround withcontinued operationalimprovementLeverage on high end technologyBrownfield expansion Pindaproject, Brazil

Price Leader Cost Leader Capability Leader

Seamless Global One Metal business


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T hank Y ou!

Hindalcos Copper Operations - Focused Value Extraction in Copper


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Abil ity to extract value from By-Products and Captive Infrastructure

Smelter

Phosphoric Acid Plant

Cu Anodes

Sulphuric Acid

RockPhosphate

Ammonia

Cu Conc.Refinery

Precious Metals Refinery

Cu Cathodes

Anode Slime

Silver (150 ktpa)

Di-AmmoniumPhosphate(400 ktpa)

Gold(15 ktpa)

Phosphoric Acid

Captive All-Season Jetty Captive 135MW power plant Captive Oxygen Plant

Documents

Investor Presentation Sep2010