The shares of leading aluminum manufacturers gained up to 5 percent after the company’s net profit and revenue magnified by 415 percent and 31 percent YoY, respectively in Q2FY25.
With a market capitalization of Rs 41,085.45 crore, the shares of National Aluminium Company Ltd were trading at Rs 225 per share, increasing around 3 percent as compared to the previous closing price of Rs 219.80 apiece.
Reason for Rise:-
The shares of the company have seen bullish movement after National Aluminium Company Ltd announced its financial performance in which revenue magnified by 31 percent on a year-on-year basis from Rs 3,043 crore in Q2FY24 to Rs 4,001 crore in Q2FY25. However, on a Quarter-on-Quarter basis, revenue zoomed by 40 percent from Rs 2,856 crore in Q1FY25 to Rs 4,001 crore in Q2Y25.
Moreover, net profit jumped by 415 percent on a yearly basis from Rs 206 crore in Q2FY24 to Rs 1,062 crore in Q2FY25, meanwhile, on a quarter-on-quarter basis, net profit magnified multifold time by 77 percent from Rs 601 crore in Q1FY25 to Rs 1,062 crore in Q2FY25.
Brokerage Recommendations:-
Emkay Global Financial Services, one of the well-known brokerages in India, gave a ‘Buy’ call on aluminum stock with a target price of Rs 275 per share, indicating a potential upside of 22 percent from Thursday’s price of Rs 225 per share.
As per the brokerage, the business to churn even stronger quarterly profits and cash flows in Q3, supported by elevated alumina prices as well as relatively higher aluminum prices.
In addition to the preceding paragraph, the brokerage stated that its investment case for NALCO is based on three distinct factors (near-term price strength, 1mtpa alumina expansion, and a move into captive coal mining) that would strengthen business fundamentals and translate into solid earnings momentum over the next 2-3 years.
Remarkable return:-
The stock has given a return of 17.50 percent in 6 months and a multi-bagger return of 137.39 percent in a year. If an individual invested Rs 1 lakh a year ago, it would be worth now Rs 2.37 lakh.
Production Target:-
The company’s purpose is to produce 0.46 million tonnes of aluminum in FY25, matching its output from the previous year. As of mid-August 2024, NALCO had achieved 97% of its production capacity, with 940 out of 960 pots operational at its smelter plant.
Capex Plan:-
NALCO has set a capital expenditure target of ₹2,000 to ₹2,500 crore for FY25, focusing on enhancing production capabilities without compromising its net cash position.
Company profile:-
National Aluminium Company Limited is an India-based company that is primarily engaged in the business of manufacturing and selling alumina and aluminum. The Company’s segments include Chemical and Aluminium. The Chemical segment includes calcined alumina, alumina hydrate, and other related products.
Written by:- Abhishek Singh
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