Buy National Aluminium Co, target price Rs 202: Kotak Securities

Kotak Securities recommends buying National Aluminium Co (NALCO) at the current market price of Rs 195.6. The investment firm believes that the company's strong fundamentals and growth prospects make it an attractive investment opportunity. NALCO is expected to benefit from rising aluminum prices and increased demand for its products. The target price set by Kotak Securities is Rs 202, implying a potential upside of 3.3%. Investors with a medium-term investment horizon are advised to consider this buy call.

About National Aluminium Co:

National Aluminium Company (NALCO) is an Indian public sector undertaking and a manufacturer of aluminium and alumina. Headquartered in Bhubaneswar, Odisha, NALCO has an integrated aluminium complex at Angul, Odisha, encompassing a 460,000-tonne-per-annum (tpa) smelter, a 2,250,000-tpa alumina refinery, and a 1200 MW captive power plant. The company also operates a 1,486,000-tpa bauxite mine at Panchpatmali, Odisha, and a 500,000-tpa aluminium smelter at Jharsuguda, Odisha. NALCO is a leading producer of aluminium in India and exports its products to over 40 countries.

52 Week Price Trend:

National Aluminium Co (NALCO) is a Navratna PSU under the Ministry of Mines. The stock has been witnessing a steady rise in its market price, currently trading at Rs 195.6. This represents a 47.1% increase from its 52-week low of Rs 121.65. However, it is still below its 52-week high of Rs 263.1, indicating potential room for further growth. NALCO's strong financial performance, backed by rising aluminum prices and increased demand, has contributed to its positive market sentiment. Analysts remain optimistic about the company's prospects, citing its robust order book and expansion plans.

Stratzy's MOST Analysis:

NATIONALUM's AAA rating from Stratzy's MOST framework indicates the company's exceptional performance in all four pillars of Management, Outlook, Safety, and Trend. This suggests that NATIONALUM has strong leadership, a positive business outlook, a solid financial position, and favorable market trends. The AAA rating signifies that the stock poses Low Fundamental Risks and is a relatively safe investment choice according to Stratzy's analysis.

Company's Fundamentals:

National Aluminium Co. (NSE: NATIONALUM) exhibits attractive valuation metrics. Its Stock PE of 12.89 indicates that investors are paying a reasonable multiple of 12.89 times the company's earnings per share. The PB Ratio of 2.32 suggests that the current market price is 2.32 times the company's book value, which is a common measure of a company's assets minus its liabilities. Additionally, the Dividend Yield of 2.5% offers investors a steady stream of income. These metrics collectively suggest that NATIONALUM is currently trading at a reasonable valuation with the potential for both capital appreciation and dividend income.

Fundamental and Technical information provided in this blog were last updated on 14 Jan, 2025

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