Hindalco Industries Ltd

Investor Presentation Q2 FY11

November 2010

Industry Backdrop

Results Highlights Aluminium: Business Conditions & performance Review

Copper: Business Conditions & p pp performance Review

Projects An Update

Industry Backdrop

Robust growth in global metals consumption

though supported by re-stocking / base effect / stimuli Aluminium Consumption (Mn ton annualized) ton,
41.9 37.4 34.3 34 3 10.0 37.8 11.1 41.6

World
18% 8%

Copper Consumption (Mn ton annualized) ton,

17.5 17.9 19.3 17.0 17.9 18.5

RoW o
16% 9%

6.0

7.2

12.6

17.5

China
20% 11%

5.1 7.3

14.8

12.9

North America + Europe 18% 5%

6.9 4.1
2008 2009 2010 Q1 2010 Q2 2010 Q3

2008

2009

2010 Q1 2010 Q2 2010 Q3

Growth (2010 est) Source: Industry

Indian Growth Momentum to Continue

Electrical & Electronics

Aluminium consumption (kt)

966

Building & Construction

910

Consumer Durable

H1 FY10

H1 FY11

Large scope for metal consumption to rise from current levels End user segments have a strong/positive outlook i e i.e. Power, Transport, Construction, Industrial etc Rising per capita consumption of in India

6%

Automobile & Transport A t bil T t

Copper consumption (kt) C ti

307

Industrial Machinery

296

H1FY10

H1FY11

Packaging
4%

H1 growth affected by temporary slowdown in electrical demand, which is primarily dependent on Govt. allocation

Result Highlights

Q2 FY 11: Highlights

Robust Performance amidst challenging conditions

Proactive Steps

HigherAluminium VAPSales ImprovedMix

HighestEverproduction ofCCR

Smelteroutage Hirakud Smelter outage

Highest Ever Production at EverProductionat Muri

LowerCuPremium

Efficiencies improvement i inAluminium

CoalPriceSurge

ReducedInventorylevelsto increasethemetalsales. increase the metal sales

Efficienciesimproved

Kalwa VRS

pp Copper

Higher EBIT despite adverse impact 8

Financial Performance
` Cr Net Sales PBITDA PBT PAT EPS (`) ` Cr Net Sales PBITDA PBT PAT EPS (`)
9

Q2 FY10 4,915 666 434 344 2.02 H1 FY10 8,812 1,500 1,034 1 034 825 4.85

Q2 FY11 5,860 780 556 434 2.27 H1 FY11 11,038 1682 1,229 1 229 968 5.06

Change (%) 19 17 28 26 12 Change (%) 25 12 19 17 4

Q2 profit would have been significantly higher, but for Hirakud production loss and Kalwa VRS settlement

Aluminium: Business Conditions & Performance Review

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Al: External Drivers

Driver LME

Current Assessment Support from global liquidity and cost pressures, but downside risks related to rewind of financing deals USD weakness and continued FII flows to India may lead to rupee appreciation Upward pressure related to coal and carbon costs

Impact

INR USD Input prices

p g Demand in Outlook positive for most aluminium-consuming India sectors

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Aluminium Industry : Cost push to continue

World average hot metal cost Composition
Others Carbon cost - Correlated with commodity price cycle Labour cost - Hardening of emerging market currencies, including RMB
10%

13% 38%

Alumina - Resource companies insisting on short-term contracts - De coupling of alumina & aluminium

7%

32%

Power - Electricity price hikes in China - Power cuts in certain Chinese provinces leading to cutbacks in production (~1.5 mt capacity)

Cost Push to continue Support for prices?

12
Source: Industry & company estimates

Strong Production performance despite Hirakud production loss

Alumina (kt)
11%
347

Metal (kt)
140 Hkud 123

12%

Growth in Output
(H1 FY11 vs H1 FY10)

Hkud

Alumina Metal FRP Extrusions

10% -4% 3% 3%

312

100 Rkoot

103 Rkoot Q2 FY11

Q2 FY10

Q2 FY11

Q2 FY10

FRP (ton)
53,150 53 150

2%
54,042 ,

Extrusions (ton)
2%
9,815 9 815

Adverse impact contained through

9,637

efficiency improvement Higher alumina & wire rod production

13

Q2 FY10

Q2 FY11

Q2 FY10

Q2 FY11

Steps taken to minimise impact of Hirakud production loss

Increased third-party sale of specials and standard

Improved sales mix

138 kt 128 kt Primary-Exp

100.0 90.0 80.0 80 0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0

84 kt
48% 49%

54 kt

34.2

PrimaryDom 6% VAP 6%

33.5

44%

50%

Q2 FY10 Specials

Q2 FY11 Standard

Q2 FY10

Q2 FY11

Sacrificed volumes mainly in Primary Exports

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Q2 FY 11: Strong Aluminium numbers

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Aluminium Business: Financial Performance

Q2 FY10 Q2 FY11 Change (%)

(` cr)
Net Sales & Operating Revenue EBIT

1,649 259 H1 FY10

1,911 424 H1 FY11

16 64 Change (%)

(` cr)
Net Sales & Operating Revenue EBIT
16

3,067 3 067 714

3,778 3 778 976

23 37

Copper: Business Conditions & Performance Review

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Copper: External Drivers

Driver TCRC LME/INR INR Acid prices Energy prices

Current Assessment Long term TCRC lower than last year LME being supported by liquidity Appreciating rupee Recently on an improving trend Correlated with commodity cycle; likely to be firm

Impact

Challenging ti Ch ll i times
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Custom Smelters : Low TCRC, Rising energy costs

Structural shortages likely to continue

( ) (Mn Ton) Mine Supply Smelter Demand
13.0 13 0 13.0 13.2 13.1 12.8 12.3 12.2 12.4 12.5 13.7

Rising energy costs

Input Imported coal Furnace oil Propane

% change H1FY11 Vs HiFY10 >10 >20 >25 >5

2007

2008

2009

2010 (E)

2011 (P)

TCRC to continue to remain under pressure FY 10 bench mark TCRC were significantly FY higher than FY11 benchmark
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LNG

Cu: Production Performance

Q2: Record cathode production and sharp jump in Own CCR production
Cathode C th d (kt) Own CCR(kt) O

5%
94

41%
43

90

31

Q2 FY10

Q2 FY11

Q2 FY10

Q2 FY11

Strong operational performance St ti l f

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Copper Business: Financial Performance

(` cr) Net Sales & Operating Revenue EBIT (` cr) Net Sales & Operating Revenue EBIT
21

Q2 FY10

Q2 FY11

Change (%)

3,268 3 268 217 H1 FY10

3,951 3 951 129 H1 FY11

21 (41) Change (%)

5,748 374

7,265 253

26 (32)

Mining : ABML Highlights

Nifty Sulfide Production (tons) Nifty EBIDTA (A$ mn)

29491
11% 18%

89.7

26488

75.7 75 7

FY10 H1

FY11 H1

FY10 H1

FY11 H1

Strong Performance
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Copper business Strategic initiatives paying off

Key focus areas Drivers Cost effective brown field expansion Strategic advantage through technology Asset sweating Service level differentiation Quality edge Jetty /port infrastructure to overcome locational disadvantage Sourcing Mix optimisation Regional redistribution points Global Scale Top Quartile Cost Curve By-Products value extraction Value added downstreaming g A cost effective Upstreaming strategy Mining acquisition Strategic alliances/partnership

III

1 2 3 4 5 6

Capital Efficiency Leadership in domestic market offering better realisation Supply Chain Reengineering Global C t Gl b l Cost Competitiveness Value Chain Enhancement Long Term feedstock securitisation

Transforming the copper business into a globally competitive smelting value chain

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Projects An Update

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Utkal Alumina

Engineering

Basic Engg-100 % Complete, Detailed Engg- 95% Completed, not on critical path Obtained Over 82% More than 7,000 people working at site. p p g Major Contractors like L & T, Simplex, GDC mobilized fully at site. 94% of Piling work completed. RCC, structural, fabrication and erection has been ramped up and is on track for timely completion. Erection of BTG units under progress

Statutory Clearances Commitment g Site Progress

Power Plant

25

Expected completion -Q2 FY12

Activity at Site: Utkal

Evaporation area: Erection of equipment under progress Mud Washing: erection of DCW under progress

BTG Package: ESP#1: Hooper erection under progress g p p g

BTG Package: Boiler#1: Insulator erection

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Mahan Aluminium
Engineering Statutory pp approvals Orders Commitment Basic Engineering - 94% Complete, Detailed Engineering-60% Complete All Major approvals in place. Orders for all major, long delivery equipment placed. Around 83% Around 12,000 people at site. Major Contractors like L & T, BHEL, Rohan builders etc are working. Concreting & structural work p g g progressing in line with the first pot start up g p p schedule. Power plant Fabrication and erection in line with the start up of the power plant. Foundation for 5 boiler units, 4 ESP units, 2 power house units completed. completed Work on other units in full swing. Work on all chimneys in full swing swing. Two chimney completed- 125 m height. Erection of engineering structure for boilers in progress.

Site Progress Power Plant

27

Expected Completion Q2 FY12

Activity at Site: Mahan smelter

Pot Room Cathode sealing shop

GTC1 B filt & Bag filter crust bath silo support structure erection

GTC1 ID Fan foundations & Stack

28

Activity at Site: Mahan CPP

Erection work in Boiler #2 Chimney #4 - Assembly of Slip form

Erection of Boiler #2 columns

Reinforcement & Shuttering work for TG#2 Deck slab

29

Aditya Smelter

Engineering Statutory approvals Commitment Site Progress

Detailed Engg- 68% Complete Engg Major approvals received. Forest land stage I clearance received. Permission to start project site consolidation activities received. received Stage II clearance awaited awaited. Around 66%. Major orders placed (along with Mahan) Area grading ,Piling undergoing. R & R under progress. Civil contractor - HCC Team has mobilized well with hydraulic rigs and civil work in permitted fronts is in full swing.

30

Expected Completion Q3 FY12

Activity at Site: Aditya Smelter and CPP

Pot Room Foundation 220 KV switch yard

Intake well with substation

Boiler foundation

31

Hirakud Smelter and Power Plant Expansion

Smelter Expansion Power Pl t P Plant Expansion Schedule Technology Progress Capacity increase from 161 to 213 ktpa thru addition of 80 Pots of 235 kA

Capacity t increase t 467.5 MW by Addition of 100 MW C it to i to 467 5 b Additi f MW. 30 pots to be commissioned by Dec2011 & balance 50 pots by Mar2012 GAMI Design Power Plant 1. DCPL has been engaged as the EPCM consultant, Engineering is progressing well 2. Major orders for the power plant already placed. Smelter 1. Basic Engineering by GAMI- completed. 2. Major orders like wagons, alumina handling placed. Other major orders being finalized. 3. SPL has been vacated to storage shed. New plant rectifier station will be erected over here. 4. Site grading 80% and boundary wall 90% completed.

Smelter expansion from 155 to 161 KTPA under phased commissioning

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Project Blue Fox

Scope Dismantling and receipt of q p equipments Cold Mill Hot Mill

Brownfield project Can Body Stock at Hirakud Dismantling completed. All containers received at Vizag port 13000 MT. Order placed on Achenbach. Order placed on ABB for refurbishment of Main Motors Work Motors. progressing as per schedule. Excavation and f E ti d foundation of building column i progress. d ti f b ildi l in Site Leveling and Boundary wall work in progress.

Civil work

33

Project Completion Q2 FY12

Jharkhand Smelter

Land

Total land requirement of ~4000 acres for the project. Both private as well as Govt land acquisition started started. Water drawl clearance received for 55 MCM.

Water

Environmental Application to be submitted after sizeable quantity of land has clearance been acquired. Feasibility Reports DFR is ready.

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Expected Completion FY14

Aditya Refinery

Land Water

Majority land acquired, Rest process on track Water drawl agreement in place M/s Simplex Infrastructure Ltd is awarded with the job for supply & erection of water drawl arrangement. They have completed the ground survey work for route alignment for 15 Km. Terms of Reference (TOR) presentation date is awaited. Job has been completed. Line energized. Railway siding clearance obtained obtained.

Forest clearance Construction power Railway

35

Expected Completion FY14

Towards Sustainable Leadership

Domestic operations
User industries of aluminum have a bullish outlook Robust sector fundamentals Long on Alumina Introduction of new futuristic value added products (Al) New avenues for copper use

Expansion Projects
Greenfield projects expected to be in global best quartile for manufacturing costs Infrastructure available for further scalability in the future Brownfield capacity increase advantage

Novelis
Improving product mix to drive margins and growth Successful relocation of Roger Stone Convergence of EBITDA and Adjusted EBITDA Leader in Al Recycling

Driver

Leading market share in VAP

Highlights

Continued focus on operational excellence for both Al b th Aluminum and Copper i dC Low cost base and robust de-risked business model

Focus on timely delivery of planned projects Maintain high quality of execution Low capex cost per ton with best in class operating capacities

Financial turnaround with continued operational improvement Leverage on high end technology t h l Brownfield expansion Pinda project, Brazil

Sustainable growth

Achieve potential

Stabilize and transform

Strategy Price Leader Cost Leader Capability Leader

Seamless Global One Metal business

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Forward Looking & Cautionary Statement

Certain statements in this report may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied Important factors that could implied. make a difference to the companys operations include global and Indian demand supply conditions, finished goods prices, feed stock availability and prices, cyclical demand and pricing in the companys principal markets, company s changes in Government regulations, tax regimes, economic developments within India and the countries within which the company conducts business and other factors such as litigation and labour negotiations. The company f g g p y assume no responsibility to publicly amend, modify or revise any forward looking statement, on the basis of any subsequent development, information or events, or otherwise.

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Thank Th k you

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