National Aluminium Company Ltd. share price target

US sanctions on Rusal (April 2018) and alumina cost push led to ~10% rise in the aluminium prices since Feb'18 end. Besides, supply disruptions, the sanctions also restrict Rusal's ability to complete new projects or ramping up of exiting capacities (1.5-1.6MT), restricting any new supply coming into the market. This, coupled with China's emphasis on environmental sustainability should support aluminium prices in the near to medium term. As we believe that, lower supply from China, low inventory, and deficit (exChina) will continue to support the aluminium prices. Given the recent uptick in aluminium prices, we believe, NALCO should report improvement...

NALC is undertaking various projects to expand capacity by 500kt at smelter, 1mtpa at alumina refinery, etc. We understand that actual spend on alumina project has started, while other projects are still on drawing board. Therefore, we are increasing capex from INR6b in FY18 to INR11b in FY19E. NALC is a play on LME and alumina price. We are factoring in LME of USD2,000/t and alumina prices of USD350/t. The stock trades at 7.2x FY19E EV/EBITDA. We value the stock at INR79/share based on FY20E SOTP. Every USD100 change in LME increases the target price by INR16/share. Maintain Neutral.

National Aluminium Company Ltd Q2FY18 results comment Revenue increased by 28.42% to Rs. 2454.76 Cr in Q2FY18 when compared to the previous quarter. Also, it increased by 32.97% when compared with Q2FY17.

NALCO's 2QFY18 EBITDA, as expected, increased by healthy 47% QoQ/95% YoY to INR3.3b driven by higher realization and volumes. Though there was an impressive beat on alumina volumes, it was offset by lower than expected realization and cost inflation. Exceptional income of INR1.6b included DMF reversal of INR1.9b, net of entry tax provision of INR0.3b. Adj. PAT increased 73% QoQ / 84% YoY to INR2.2b, ahead of est. of INR1.6b on higher other income and lower tax rate (at ~27% vs. est. 33%). n Alumina production was down just 3% QoQ to 509kt (est. 444), despite...

Volume De-growth A Negative Surprise; Maintain HOLD Missing our estimates on all counts, National Aluminium Company (NALCO) has delivered a weak performance in 1QFY18, largely due to lower sales volume and higher input cost. EBITDA increased by 17% YoY (down 47% QoQ) to Rs2.3bn vs. our estimate of Rs3.46bn. While its employee cost surged by 24% YoY to Rs4.3bn owing to provisioning for wage hike, Power & Fuel cost rose by 23% YoY to Rs6.2bn due to increase in electricity duty on captive power generation in Odisha. On the volume front, alumina sales fell by 11% YoY and 31% QoQ to 259,000 tonne vs. our estimate of 330,000 tonne, largely due to inventory build-up ahead...

Revenue rose by 21.89% to Rs. 2423.26 Cr in Q4FY17 when compared to the previous quarter

BUY National Aluminium Company Ltd (NALCO) CMP at Rs. 65.80 and add on dips to Rs. 57-59.5 for the Sequential Targets of Rs. 77 - 85.40

National Aluminium Company (NALCO) has posted strong performance in 3QFY17, which was largely in-line with our estimate. EBITDA increased by 102% YoY and 66% QoQ to Rs2.9bn tad lower than our estimate of Rs3bn, as its alumina realization declined to US$269/tonne vs. our estimate of US$295/tonne. Continuing its northward movement, power cost rose by 16% YoY and 12% QoQ to Rs5.9bn, which we assume owing to higher coal cost. Despite a dismal performance by aluminium division with marginal EBIT of Rs1,158/tonne in 3QFY17, we continue to remain positive on NALCO as its alumina cost of production being one of the lowest in the world due to...

Revenue grew by 8.31% to Rs. 1963.81 Cr in Q3FY17 when compared to the previous quarter. Also, it increased by 13.92% when compared with Q3FY16.

Weak Performance on Higher Cost of Inputs National Aluminium Company (NALCO) has delivered weak performance in 2QFY17 missing our estimates on all counts due to higher-than-expected cost of inputs. EBITDA declined by 51% yoy & 12% qoq to Rs1.72bn (vs. our estimate Rs2.3bn). Power cost surprisingly rose by 7% yoy & 5% qoq to Rs5.3bn, which is presumably due to higher coal expenses. Aluminium division sold ~99,000 tonne (+6% yoy & +20% qoq), marginally higher than our estimate of 95,000 tonne. Regional premium for the Aluminium division declined 40% yoy to US$320/tonne. Alumina sales volume...