Motilal Oswal has given Buy recommendation for Nalco recommended buy rating on the stock with a target price of Rs 93 in its research with a target price of Rs. 93 in its research report issued on Jun 28, 2021
Motilal Oswal’s research report on Nalco
Nalco (NACL)’s 4QFY21 result was strong, led by higher LME prices and lower costs. It reported EBITDA of INR9.4b (+118% QoQ) and PAT of INR6.3b (+162% QoQ). We raise our FY22E/FY23E EBITDA estimate by 43%/27%, factoring in higher aluminum prices, which should support strong cash flows and a good dividend payout. Maintain Buy.
We value the stock on an SoTP basis at 5x FY23E EV/EBITDA and a 0.75x book value for growth CWIP to arrive at TP of INR93. At CMP, it provides an attractive dividend yield of ~6%. Maintain Buy.