Brokers’ picks: Hindalco Industries, MphasiS

Espirito Santo says Sell Hindalco

Target: Rs 90

Current Price: Rs 102

> Massive expansion should boost volume, but margin pressure seen

> Flattish to downward EBITDA guidance at Novelis for FY14, despite new facilities coming up

> Greenfield smelters at Hindalco (Mahan & Aditya) to face cost

> Consolidated net debt, which increased by Rs 130 bn in FY13, to rise further

Nomura Reduces Rating on MphasiS

Target: Rs 90

Current Price: Rs 456

> Muted organic revenue and EPS growth; disappointed with a 5% qoq decline in Q2

> Margins: Disappointed with an 80-bps qoq decline and further decline likely

> An Organic revenue decline of 4% over FY12-14F likely, added by decline in HP biz

> MphasiS, despite flattish earnings growth over FY12-14F, trades at ~13x FY14F EPS of Rs 38.8