Why NALCO’s share price suddenly jumped?

National Aluminium Business Ltd., founded in 1981, is a Mid Cap company in the Metals – Non-Ferrous sector with a market capitalization of Rs 18,632.63 crore.

Aluminum, Alumina, Wind Power, and Other Operating Revenue are among National Aluminium Company Ltd.’s primary products/revenue segments for the fiscal year ending 31-Mar-2020.

The company reported a Consolidated Total Income of Rs 2,506.29 Crore for the quarter ended June 30, 2021, down 12.81 percent from the previous quarter’s Total Income of Rs 2,874.47 Crore but up 77.26 percent from the same quarter last year’s Total Income of Rs 1,413.92 Crore. In the most recent quarter, the company generated a net profit after tax of Rs 347.73 crore.

National Aluminium Company Limited (NALCO) has been upgraded from ‘underweight’ to ‘neutral,’ with a target price of Rs 104 up from Rs 46. Aluminum, according to firms, is the best-placed metal. Aluminum gets expected to be in deficit from FY21 to FY23.

That is according to the firm’s global commodity team. It has raised the price projection for the metal by nearly 35% for CY22 and almost 18% for CY23. That would imply that all aluminum stocks, such as NALCO will see significant EPS upgrades, with upside risk to earnings.

This leading giant rose over 6% on Friday and several factors have contributed to this. Stock prices are rising on expectations of a volume recovery, an increase in alumina pricing, and an approaching dividend payout.

Furthermore, alumina prices have lagged behind the significant rise in aluminum prices. Alumina prices appear to be catching up due to shutdowns in China’s Guangxi province and increasing demand.

In addition, the street is anticipating a fantastic Q2FY22. Lower sales volumes struck the April-June quarter production data suggested that inventory build-up could have been one of the causes for the poor volume numbers.

The street believes that now that inventory can get sold in the future quarters, the rise in volume combined with the price hike will help the company’s profitability.

When these elements are combined, it explains why the stock is flying off the shelves and has recouped the losses it suffered following the release of its Q1FY22 earnings report, when the price experienced a steep drop.

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