NALCO Q3 Results Review - Lower Input Costs Drive All Round Beat: Axis Securities

Axis Securities Report

National Aluminium Company Ltd.'s reported a strong set of numbers with Revenue/Ebitda/profit after tax beating ours and consensus estimates. Revenue at Rs 3,347 crore grew by 2%/10% YoY/QoQ (3% beat versus. our estimate).

Ebitda stood at Rs 773 crore (up 68%/95% YoY/QoQ) a 39% and 59% beat against our and consensus led by lower raw material (down 26%/10% YoY/QoQ), power and fuel (down 23%/19% YoY/QoQ) and employee expenses (down 6%/3% YoY/QoQ).

National Aluminium Company has declared its 2 nd interim dividend of Rs 2/share, bringing the total interim dividend to Rs 3/share for FY24. The record date for the 2nd Interim dividend is fixed at February 23rd 2024.

Valuation And Recommendation:

We value the company at 7.0 times FY26E Ebitda (from 4.5 times FY25E) and 0.5 times book value of capital works-in-progress (unchanged).

The target price at Rs 160/share implies an upside of 13% from the current market price. We revise our rating from 'Hold' to 'Buy' on the stock.

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