National Aluminium Company Ltd. share price target

alumina NSR improved 83% YoY to USD670/t, while that for metal grew 22% YoY to USD2,973/t on strong LME. EBITDA grew robust 149% YoY on favorable pricing and lean cost structure supported by captive coal. Mgmt. guided for...

We maintain our BUY rating.

Nalco posted a solid quarterly performance given EBITDA of Rs23.3bn (+21.1% vs Consensus; +26.1% vs Emkay; +50.3% QoQ), with the earnings beat led by higher alumina export volumes, while benefitting from elevated alumina prices.

We upgrade from HOLD to BUY.

National Aluminium Company’s (NALCO) EBITDA was significantly lower than our/consensus estimates. We estimate Alumina sales to be down 56% YoY while Aluminium sales to be down 11% YoY.

We downgrade to HOLD from BUY.

Nalco (NACL)’s revenue stood at INR29b in 1QFY25 (-10% YoY/-20% QoQ vs. our est. of INR39b). The miss was mainly due to the weak operational performance in the chemical business.

We maintain BUY on the stock

NACL consolidated revenue stood at INR36b (YoY/QoQ: -3%/+7%) against
our estimate of INR39b. Consolidated EBITDA stood at INR11b (YoY/QoQ:
+45% /+43%) and was higher than our est of INR8.4b. Consol EBITDA
margin stood at 30.9% in 4QFY24 (20.9% in 4QFY23 and 23.1% in 3QFY24).

Recommendation: We revise the stock from HOLD to BUY.

We maintain our HOLD rating on the stock.

Recommendation: After an 18% rally since the last quarter, we see a limited upside from here on. Our TP offers a 1% upside from the CMP hence we revise our rating from BUY to HOLD.

NALCO’s Q1FY24 EBITDA at INR 5.9bn missed our estimate by 9%. Key points: 1) Aluminium (Al) volume was down 7% YoY, flat QoQ at 117.1kt; 2) EBIT of both chemicals and aluminium divisions was down owing to lower realisation; 3) power & fuel cost rose 4% YoY despite commencement of captive mining at Utkal D block; and 4) Board recommended final dividend of INR1/share for FY23.

Recommendation: We revise our EBITDA estimates upwards on lower coal costs, our TP of Rs 90/share implies a 12% upside from the CMP and we upgrade NALCO from HOLD to BUY.