National Aluminium Company Ltd (NALCO), a Navratna PSU company engaged in the metal and mining sector, is piping hot to buy due to its growth prospects, net cash position and integrated operations. NALCO is currently trading around Rs 190, and has a strong return on equity of nearly 27% as of March 20. NALCO shares surged sharply in the latest session.
NALCO Share Price:
After market hours of March 20, NALCO stock zoomed by 2.3% to close at Rs 190.65 apiece on BSE, with a market cap of around Rs 35,015.39 crore. The stock's 52-week high and low are at Rs 263.10 apiece and Rs 135.10 apiece respectively. The stock's return on equity is low at 8.21x, while ROE is at 26.88%, as per BSE data.
In the past six months, NALCO stock gained by nearly 6%. In a year, the upside is about 31%.
Dividend: NALCO shares hold a strong record of 47 dividends distribution since August 2003, as per Trendlyne data. In the last 12 months, the dividend payout was Rs 10 per share. Its current dividend yield is 5.25%.
Stock Split: Also, the heavyweight PSU has split in the ratio of 1:2 with effect from March 16, 2011, where its face value was subdivided from Rs 10 to Rs 5 each.
Bonus Issue: In March 2011, the company also delivered a bonus issue of a 1:1 ratio.
During Q3FY25, the company posted an impressive net profit of Rs 1,583 crore, compared to Rs.488 crore in the corresponding quarter of last year. NALCO has registered a total income of Rs.4,761 crores in Q3 of FY25 compared to Rs.3,398 crores in Q3 of FY24.
Also, the net profit and revenue from operations for the 9 months ended December 2024 work out to Rs.3,246 crore and Rs.11,520 crore respectively, as against the corresponding figures of Rs.1,044 crore and Rs.9,570 crore of the previous fiscal, recording an increase of 211% in net profit and 20% in revenue from operations.
BUY NALCO Share:
As per Antique Stock Broking, Nalco is among the lowest-cost bauxite, alumina producers and is a major exporter of alumina (selling ~1.2 MT of alumina, ~0.5 MT of aluminum) annually with the company operating at close to full capacity. The 4QFY25TD average LME spot aluminum price at USD 2,616 per ton has strengthened 19% YoY and 2% QoQ while current Chinese alumina future contract at USD 448 per ton is flat YoY after correcting ~43% from peak levels of USD 783 per ton in December'24. Alumina spot prices are 11%/ 19% higher than our FY26/ 27 assumption.
Additionally, the broker pointed out that the company is in the process of consolidating Utkal D and E coal blocks to operate as a single 4 mtpa capacity mine and incremental captive coal would replace higher cost e-auction coal, driving further power and fuel cost savings. The 1 mtpa brownfield alumina expansion is expected to be commissioned by December'25 with full ramp-up by FY27. Aluminum smelter expansion of 0.5 mtpa is also planned over the next few years. Strong alumina/ aluminum prices and additional alumina volume would aid topline, while captive coal mining, softened prices of crude derivatives would drive further cost reduction and support margins.
On the valuation, Antique's note said, "We like Nalco's growth prospects, integrated operations, and net cash position. We maintain BUY rating and our target price of INR 261 basis a target multiple of 6.3x FY27E EV/EBITDA."
About NALCO:
National Aluminium Company Limited (NALCO), a 'Navratna' company under the Schedule 'A' category of CPSEs, was founded on 7th January 1981 with its registered office in Bhubaneswar. It is one of the country's largest bauxite, alumina, aluminium and power complex. Currently, the Indian government owns 51.28% of NALCO's equity capital. The Company has been operating its captive Panchpatmali Bauxite Mines for the pit head Alumina refinery at Damanjodi, in the District of Koraput in Odisha and the Aluminium Smelter & Captive Power Plant at Angul.
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