IIFL Securities Stock Market Watch Today: Buy National Aluminium Co - March 21

IIFL Securities initiated coverage on National Aluminium Co. (NALCO) with a buy rating and a target price of Rs 150, citing the company's strong fundamentals, including its low-cost operations and stable demand outlook. NALCO's current market price is Rs 145.05, indicating a potential upside of around 3.4%. The company's strong balance sheet and healthy cash flows were also highlighted as positive factors in the report.

About National Aluminium Co:

National Aluminium Company (NALCO) is a leading Indian producer of aluminium and alumina. Incorporated in 1981, NALCO is a Navratna PSU under the Ministry of Mines, Government of India. The company operates four smelters, one alumina refinery, two captive power plants, a coal mining block, and a port. NALCO's products include aluminium ingots, billets, slabs, and alumina. The company exports its products to over 50 countries. NALCO is committed to sustainable development and has been awarded several accolades for its environmental performance.

52 Week Price Trend:

National Aluminium Co (NALCO) has been trading at Rs 145.05, significantly lower than its 52-week high of Rs 169.3 and higher than its 52-week low of Rs 75.7. The company's stock has been on a volatile trajectory, influenced by factors such as the global commodities market, demand-supply dynamics in the aluminium sector, and macroeconomic conditions. Investors looking to enter the market should conduct thorough research, consider the risks and rewards, and consult with financial professionals to make informed decisions.

Stratzy's MOST Analysis:

Despite having some weaknesses, NATIONALUM's overall financial health is considered stable as per Stratzy's MOST framework, which evaluates companies based on Management, Outlook, Safety, and Trend. The BBB rating indicates that the company faces medium fundamental risks. While the management and outlook are favorable, areas such as safety and trend may require improvement. This assessment suggests that NATIONALUM has a solid foundation but should consider addressing potential risks to enhance its overall financial strength.

Company's Fundamentals:

National Aluminium Co (NSE: NATIONALUM) is trading at a Stock PE of 18.4, which indicates that investors are willing to pay Rs. 18.4 for each rupee of earnings. The PB Ratio of 2.12 suggests that the company's market value is 2.12 times its book value, indicating a premium valuation. Additionally, the Dividend Yield of 2.87% provides investors with a steady stream of income. These metrics collectively indicate that while NATIONALUM is valued above its book value and earnings, it offers a decent dividend yield for income-oriented investors.

Fundamental and Technical information provided in this blog were last updated on 21 Mar, 2024

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