National Aluminium Company Ltd. share price target

We continue to value the company at 5.5x FY24 EBITDA and 0.5x book value of CWIP. TP implies an upside potential of 15% from the CMP.

We initiate coverage with a BUY rating and value the company at 5.5x FY24 EBITDA and 0.5x book value of CWIP to arrive at the target price of Rs 150/share, implying an upside potential of 28% from the current levels

Nalco's 3QFY22 EBITDA grew 174% YoY and 6% QoQ driven by massive 44% YoY jump in LME aluminum prices. Similarly, Alumina recorded a sharp growth of 49% YoY and 32% QoQ, driving the topline. EBITDA and...

INR24.7b/INR5.8b/INR3.5b and was 15%/34%/38% below our estimate. Sequentially, the decline was led by lower volumes and higher costs (on a lower base due to one-offs), partly offset by higher LME prices. The miss on EBITDA was led by lower than expected aluminum volumes (91kt, 9% lower than our estimate), lower than expected realizations, and...

Revenue / EBITDA / Adj. PAT was up 19%/118%/162% QoQ to INR28.2b/INR9.4b/INR6.3b (+3%/49%/63% v/s our estimate). The beat on EBITDA was led by better-than-expected costs, partly owing to the reversal of renewals purchase obligations as per the notification issued by Odisha Electricity Regulatory Commission booked under other...

Nalco's (NACL) 3QFY21 result was strong on the back of higher LME prices. It reported an EBITDA of INR4.3b (+57% QoQ) and PAT of INR2.4b (+123% QoQ). We raise our FY21E/FY22E EPS estimate by 9%/13% to factor in a lower tax rate. We expect alumina prices to stay strong which should support strong cash flows and a good dividend payout (8% yield in FY22). Maintain Buy....

Nalco's (NACL) 2QFY21 higher-than-expected EBITDA at INR2.8b (v/s est. INR2.2b) and volumes were a surprise once again. EBITDA continues to strengthen due to LME recovery and lower input commodity costs. We raise our FY21/FY22E EBITDA estimates by 36%/28% to factor in the recovery in LME prices. Maintain Buy....

We raise our FY21 EBITDA estimate by 67% to factor recovery in LME prices, Revenue declined 34% YoY (29% QoQ) to INR13.8b on a lower LME aluminum price of USD1,493/t (-17% YoY; -12% QoQ) and lower aluminum volumes. EBITDA at INR1.3b (-38% QoQ) came in above our estimate of INR81m despite lower-than-expected volumes. Reported EBITDA still declined 40% YoY on lower alumina and It reported positive EBIT at INR470m after four quarters (v/s INR3m loss last year); revenue declined to INR9.3b (-37% YoY; -18% QoQ) on lower LME prices/volumes due to the impact of COVID-19. Aluminum LME prices have recovered to pre-COVID levels and turned positive YoY. We expect NACL to benefit from lower coal prices due to improved coal availability in India and lower input commodity costs such as furnace oil, etc. We maintain our positive stance on NACL considering its integrated business model, high cash levels, and attractive dividend yield.

NACL reported an improved 4QFY20 result, as expected, driven by lower cost of production. We raise our FY21 EBITDA estimate to factor lower input costs in FY21. Revenue declined 30% YoY (-7% QoQ) to INR19.4b on a lower LME aluminum price of USD1,694/t (-9% YoY, -3% QoQ). EBITDA at INR2.1b (+507% QoQ) came in above our estimate of INR1.2b, led by lower-than-expected production costs. Reported EBITDA still declined 60% YoY due to lower alumina and aluminum prices. EBIT loss was at INR0.2b (v/s INR1.9b profit last year); revenue declined to INR11.3b (-34% YoY, -15% QoQ) on lower LME prices/volumes due to the impact of COVID-19. Realization declined 8% YoY (and 3% QoQ) to USD1,905/t on account of lower LME and premiums. As a result, Operating Cashflows (OCF) were negative at INR3.5b. With estimated gradual recovery in aluminum demand, we expect prices to rise further.