I-Sec downgrades Nalco to Hold; lowers target price to Rs 190
ICICI Securities has downgraded
National Aluminium Company
to Hold from Add with a revised target price of Rs 190 (earlier Rs 205). The current market price of
National Aluminium Company
is Rs 183.85.
National Aluminium
Company, incorporated in 1981, is a Mid Cap company with a market cap of Rs 33764.64 crore, operating in Metals - Non Ferrous sector.
Nalco
's key products/revenue segments include Aluminium, Chemicals, Export Incentives, Wind Power for the year ending 31-Mar-2024.
Financials
For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 5393.44 crore, up 13.28% from last quarter Total Income of Rs 4761.31 crore and up 47.24% from last year same quarter Total Income of Rs 3663.09 crore. The company has reported net profit after tax of Rs 2078.37 crore in the latest quarter.
The company?s top management includes Mr.Sridhar Patra, Dr.B R Ramakrishna, Mr.Ravi Nath Jha, Dr.Veena Kumari Dermal, Mr.Dushyant Upadhyay, Dr.(Ms.)Shatorupa, Mr.Y P Chillio, Dr.Ajay Narang, Mr.Sanjay Ramanlal Patel, Mr.Sanjay Lohiya, Mr.Pankaj Kumar Sharma, Mr.Sadashiv Samantaray, Mr.Ramesh Chandra Joshi, Mr.Radhashyam Mahapatro, Mr.Jagdish Arora. Company has Patro & Co. as its auditors. As on 31-03-2025, the company has a total of 184 crore shares outstanding.
Investment Rationale
Alumina price is well past its peak and ICICI Securities expects it to remain subdued as supplies from China and India ramp up. While there might be intermittent supply disruptions, the brokerage expects the price to stay range-bound between USD 350?400/te. Furthermore, they see only a limited scope of volume growth in the near term. That said, the captive coal might lend some cost advantage. On the whole, I-Sec sees risk-reward balanced at CMP. Taking cognizance of the current underlying commodity prices, the brokerage has lowered FY26E/FY27E EBITDA by 20% each, though they raised the EV/EBITDA multiple to 5.5x (earlier 5x), as there is lower risk to our earnings estimates. The revised target price works out to Rs 190 (earlier Rs 205). They have downgraded NALCO to HOLD (from Add).
Promoter/FII Holdings
Promoters held 51.28 per cent stake in the company as of 31-Mar-2025, while FIIs owned 15.81 per cent, DIIs 15.7 per cent.
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