IIFL Securities Stock Idea: Buy National Aluminium Co with Target Rs 202

IIFL Securities has issued a buy recommendation for National Aluminium Co (NALCO) with a target price of Rs 202, representing an upside potential of approximately 4% from its current market price of Rs 194. This recommendation is based on the company's strong fundamentals, including its robust performance in the aluminum industry, strategic investments in capacity expansion, and potential for cost savings through process optimizations.

About National Aluminium Co:

National Aluminium Company Limited (NALCO), a Government of India enterprise, is India's leading producer of aluminium and alumina. Incorporated in 1981, NALCO operates an integrated complex at Angul, Odisha, comprising a 460,000-tonne-per-annum (tpa) smelter, a 2,300,000-tpa alumina refinery, and a 1,200-MW captive power plant. The company also operates a 6,500-tpa aluminium recycling plant in Sambalpur, Odisha. NALCO's products find application in various industries, including automotive, building and construction, electrical, packaging, and consumer durables. The company exports its products to over 50 countries.

52 Week Price Trend:

National Aluminium Co (NALCO) has witnessed a remarkable surge in its stock price, reaching a 52-week high of Rs 194.5 on the NSE. This represents a significant gain from its 52-week low of Rs 75.7, indicating a positive market sentiment. The company has benefited from favorable industry trends, increased demand for aluminium, and its own initiatives to improve efficiency and reduce costs. As a result, NALCO's financial performance has improved, contributing to investor confidence and driving the stock price higher.

Stratzy's MOST Analysis:

NATIONALUM has received a BBB rating under Stratzy's MOST framework, indicating medium fundamental risks. This rating is based on an assessment of the company's management, outlook, safety, and trend. The BBB rating suggests that NATIONALUM has a solid management team, positive outlook, and relatively safe operations. However, investors should be aware of potential weaknesses in these areas that could impact the company's future performance.

Company's Fundamentals:

National Aluminium Co. (NSE: NATIONALUM) boasts a stock price-to-earnings (PE) ratio of 18.4, indicating that investors are willing to pay 18.4 times the company's annual earnings per share for each share. The price-to-book (PB) ratio of 2.12 suggests that the company's market value is 2.12 times its book value, implying that investors believe the company is undervalued. Furthermore, the dividend yield of 2.87% represents the annual dividend payout relative to the current stock price, offering investors a modest return on their investment.

Fundamental and Technical information provided in this blog were last updated on 17 May, 2024

Disclaimer: The information and recommendations presented in this section, including any attached reports, are sourced from third-party providers through diverse channels. The views and opinions expressed within these materials belong solely to their respective creators. These views and opinions do not necessarily reflect the position of Stratzy Fintech Pvt Ltd. Stratzy explicitly disclaims any guarantees, express or implied, regarding the accuracy and reliability of the provided content. We strongly advise consulting with a licensed financial advisor before making any investment decisions based on this information. Remember, seeking independent financial advice is crucial.