JP Morgan has upgraded Hindalco to overweight from neutral and cut the target price to INR 170 from INR 230 citing sharp under performance versus peers in 2011 and increasing proportion of cash flows from non aluminum business.

JP Morgan said that we believe post the turnaround at the 100 (percent) owned US subsidiary Novelis, Hindalco is not a pure aluminum play with London Metal Exchange linked prices accounting for only 29% of operational profit compared to FY 2009 when they stood at 78%.

We believe even Novelis can deliver USD 1 billion adjusted operational profits even in weak economic conditions. The cut in target price reflects a lower mutiple for Hindalco's India business.

(Sourced from www.worldal.com)