For 2QFY2016, Hindalco Industries (Hindalco) standalone revenues came in 3% ahead of our expectations, but the EBITDA disappointed, coming in 16% below our estimate. Net sales increased 4.3% yoy to Rs8,841cr, vs our expectation of a 2.5% yoy decline, led by strong increase in aluminium volumes and higher credits from by-products in the copper division. The strong growth in volumes was diluted substantially by the sharp slide in commodity prices. Aluminum segment revenue increased 26% yoy whereas copper segment revenue declined 10% yoy. Copper volume growth also partially offset the decline in realizations. Sharp jump in employee and other expenses resulted in the EBITDA margin coming in 180bp below our expectations at 6.8%. The EBITDA however increased 29% yoy to Rs603cr, led by lower than expected material costs. Depreciation and finance costs jumped sharply yoy and came in marginally ahead of our expectation. However, a sharp jump in other income on account of dividend received from subsidiaries and a one-off of Rs119cr, led the net profit to increase by 31% yoy to Rs103cr, well ahead of our expectation of Rs57cr. Outlook and valuation: We expect aluminium prices to remain under pressure led by the huge oversupply situation and the Chinese...