16 DECEMBER 2013www.thehindubusinessline.com
National Aluminium Company stock price down since last Dec
Edited by : AL CIRCLE
1 min read
Global aluminium prices have been on a downtrend in the last few years. This has weighed on National Aluminium Company (Nalco) with its stock price falling around 30 per cent since last December to Rs 37 currently.
The company’s margins are stabilising due to higher sale of alumina and lower input costs. Also, Nalco’s revenues are likely to grow as alumina sales pick up. The stock trades at a discount to its global peers — Alcoa and Norsk Hydro (price-to-forward earnings of around 20 times) — and to its historic levels of over 20. However, the stock’s price-to-FY15 earnings ratio of around 11 times is at a premium to peers such as Hindalco and Sesa Sterlite, which trade at around 9 and 6 respectively. Investors can hold their position as the stock is richly valued even after steep price correction.
The company’s margins are stabilising due to higher sale of alumina and lower input costs. Also, Nalco’s revenues are likely to grow as alumina sales pick up. The stock trades at a discount to its global peers — Alcoa and Norsk Hydro (price-to-forward earnings of around 20 times) — and to its historic levels of over 20. However, the stock’s price-to-FY15 earnings ratio of around 11 times is at a premium to peers such as Hindalco and Sesa Sterlite, which trade at around 9 and 6 respectively. Investors can hold their position as the stock is richly valued even after steep price correction.
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