National Aluminum Company (NALCO), a NAVRATNA PSU engaged in the business of metals and mining, witnessed massive buying sentiment at the start of the current week, rising by nearly 3% on BSE. The performance tracked an overall bullish trend in the metal sector. With the latest upside, NALCO is now a little over Rs 45 away from hitting its 52-week high. Amidst this, is it the right opportunity to buy NALCO shares?
NALCO Share Price:
On BSE, after market hours of Monday, NALCO shares ended at Rs 217.60 apiece, up by 1.02% with a market cap of Rs 39,965.11 crore. During the trading session of December 23rd, the stock zoomed by nearly 3% to hit an intraday high of Rs 221.25 apiece.
At the current closing price, the stock is just Rs 45.5 per share away from hitting its 52-week high of Rs 263.10 apiece. While the stock has advanced by over 93% from its 52-week low of Rs 112.50 apiece. The price-to-equity ratio of the stock is at 12.61x, while the return on equity is at 19.98%. YTD, the stock has jumped by 60%.
Currently, the company has opened the gates for 518 non-executive vacancies in Angul and Damanjodi.
NALCO has a strong record of dividends, splits and bonuses.
Dividends: NALCO has delivered up to 49 dividends since August 2000, as per Trendlyne data. In the last 12 months, the stock has rewarded investors with a Rs 8 dividend per share. Currently, it has a dividend yield of 3.68%.
Stock Split: NALCO has split only once and that was in March 2011. The stock split ratio was 1:2, where the face value of Rs 10 was trimmed to Rs 5 each.
Bonus Issue: Also, in March 2011, the company delivered a bonus reward of a 1:1 ratio. Simply put, NALCO gave 1 free share on the existing 1 equity share.
BUY NALCO Stock:
Brokerage Antique Stock Broking has suggested BUY with a target price of Rs 265 on NALCO. While Axis Securities had suggested BUY for Rs 250 target price.
Axis Securities note said, " NALCO is currently trading at an elevated 12MF consensus EV/EBITDA of 9.0x (Hindalco at 6.2x), a significant premium to its LT average of 4.8x. The stock has re-rated since Jan'24 on account of i) Higher Alumina prices (spot at $693/t), ii) expectation of Alumina Refinery expansion by Sep'25, iii) Start of Utkal D Coal block and lower e-auction coal prices and lastly iv) It's JV KABIL & Argentina's CAMYEN SE's agreement in Jan'24 for exploration of Lithium brine blocks. We value NALCO now at 7.0x citing Alumina tightness and NALCO being Alumina long (1.16MT external sales in FY24). We introduce FY27 EBITDA with 18% YoY growth, as we factor in additional Alumina volumes from the 5th stream of refinery in FY27. However, we keep some buffer and model 0.5 MT (50% utilisation) from it. Delay in its expansion and capex over-run along with a fall in Alumina prices is the key Risk."
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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