National Aluminium Company Ltd. share price target

Buy National Aluminium Company Ltd CMP at Rs. 49 and add on declines to Rs. 42.5-44 for the Sequential Targets Rs. 57.50 - 61

Lackadaisical Performance on Lower Volume, Higher Cost On the back of lower-than-expected sales volume of Aluminium & Alumina along amid a overall challenging environment marked with higher cost of inputs, National Aluminium Company Limited (NALCO) has posted lackadaisical performance in 1QFY17, missing our estimate on all counts. Its EBITDA dipped 15% yoy (18% qoq) to Rs1.95bn vs. our estimate Rs2.7bn. Notably, power cost surged 19% yoy (15% qoq) to Rs5bn, which we believe to be due to coal cess. Though Aluminium division's sales rose by 6% yoy, it plunged 34% qoq to 82,836 tonne, and below...

Nalco’s 1QFY17 EBITDA of INR1.9b (-18% QoQ/-13% YoY) was below est. of INR2.4b on lower aluminum volumes and higher costs. PAT of INR1.3b (est. of INR1.8b) was down 35% QoQ/17% YoY on higher depreciation due to accounting policy change. The negative surprise on aluminum cost in the quarter was primarily on account of negative operating leverage from re-stocking led lower sales volume. We largely maintain our estimates and TP. We estimate Nalco’s aluminum production to increase from 372kt in FY16 to 441kt by FY18E as it increases smelter utilization on improved domestic coal availability.

With fixed cost of more than USD600/t, higher volumes would deliver better cost absorption. Its alumina business is in the 1 st quartile of global cost curve and would help tide through the current depressed alumina market. Cost of production has tailwind of improving domestic coal quality and start of its captive mines. Maintain Buy with TP of INR67.

9 Operating profit at Rs 2.4bn, 16% above estimates was driven by higher volumes and lower power (lower coal & FO prices) and employee costs. Higher other income (26% aboveestimates)ledtonetprofitofRs2.1bn,whichwas37%aboveourestimate....

Topping ours as well as street estimate, National Aluminium Company (NALCO) has posted strong results in 4QFY16 despite challenging environment owing to higher volume and better operational performance of Aluminium division. EBITDA rose 75% qoq (-44% yoy) to Rs2.4bn (our estimate Rs2bn) due to sharp recovery in Aluminium division aided by lower power costs and higher volume. Aluminium sales grew by 25% yoy (7% qoq) to 103,873 tonne, while Alumina sales surged 32% yoy (31% qoq) to 372,000 tonne. Continuing to remain strong amid global decline, regional premium for Aluminium division stood at US$241/tonne, while...

National Aluminium Limited (NALCO) posted weak 3QFY16 result, which was lower than our estimate, despite revenue beat due to better operational performance from the aluminium division. EBITDA, during the quarter, fell 74% yoy and 60% qoq to Rs1.4bn (our estimate Rs1.65bn). EBITDA was lower than our estimate due to higher than expected loss from the Aluminum division coupled with a steeper than expected fall in Alumina realization and lower than forecasted alumina sales volume. Alumina sales volume at 285,000tonnes (our estimate 320,000tonnes) increased 2% yoy but fell 10% qoq. Alumina realization at US$267/tonne declined 23% yoy...

stock will benefit significantly if any of these were to materialise. The latter two developments especially (if they materialise) could positively impact our FY17 operating profit/EPS estimates by 64%/51%. Our valuations will increase to Rs 57 in these events....

remain challenging with LME reaching multiyear lows and premiums declining sharply. The companyhas negotiated CY16 alumina contracts at rates that are much better than currentspotprices.Ithasbenefitedfromlowerrawmaterialcostswithmarginalscopefor...

9 Operating profit was driven by higher volumes and lower raw material and employee costs.Netprofitwas45%aboveourestimateatRs2.3bn. 8 AluminiumsegmentreportedalossofRs1.1bnasLMEpricesandpremiumdeclined....

National Aluminium Limited (NALCO) posted strong 2QFY16 result, which was above our estimate, due to better operational performance from the alumina division. EBITDA, during the quarter, fell 29% yoy but increased 52% qoq to Rs3.4bn (our estimate Rs1.9bn). EBITDA was above our estimate due to higher than expected Alumina realization and in-turn profitability. Alumina sales volume at 315,000 tonnes (our estimate 320,000 tonnes) increased 43% qoq. (It must be noted that 1QFY16 volumes were affected due to maintenance shutdowns). Alumina realization at US$302/tonne was flat qoq, but fell 7% yoy and was higher...