Kotak Institutional Equities has upgraded its rating on National Aluminium Company Limited (Nalco) to ‘Add’ from ‘Sell’, citing the company’s favorable position to benefit from the ongoing supply tightness in the alumina market. Nalco’s net long position is expected to provide a significant boost, with tailwinds from rising aluminum prices.
The report highlights that the commissioning of Nalco’s captive coal mines has successfully reduced costs in FY2024. Further ramp-ups in production are anticipated to maintain this cost reduction trend. However, the 1 million tonnes per annum (mtpa) alumina refinery expansion is progressing slowly, with volume contributions expected by the second half of FY2027.
Kotak Institutional Equities has upgraded its alumina and aluminum price forecasts, reflecting higher earnings for Nalco. The fair value (FV) of Nalco shares has been increased to Rs 235 per share, up from the previous target of Rs 160.
Disclaimer: This article is for informational purposes only and should not be construed as investment advice. Please consult with a financial expert before making any investment decisions.
