JM Financial Names NALCO a Top Diwali Pick, Targeting 17% Upside as Alumina Prices Surge

JM Financial has named National Aluminium Company Limited (NALCO) as a top investment pick for the upcoming Diwali season in Samvat 2081. The brokerage points to NALCO’s promising growth prospects, driven by factors such as the expansion of its alumina refinery, increasing alumina prices, and cost efficiencies from captive coal mining. As of October 31, 2024, NALCO shares were trading at ₹227.10, reflecting a nearly 67% increase over the past year, with a market capitalization of approximately ₹41,709.91 crore.

Highlights:

• Stock Performance: NALCO’s share price has surged over 154% from its 52-week low of ₹89.38 and is nearing its 52-week high of ₹235.40. The stock has a price-to-equity ratio of 18.04 and a return on equity of about 15.86%.
• Growth Drivers: As a public sector undertaking with 51.3% government ownership, NALCO is one of India’s leading producers of bauxite, alumina, and aluminum. In FY24, the company reported production figures of 0.46 million tons for aluminum and 2.12 million tons for alumina, with alumina exports reaching 1.17 million tons.
• Future Outlook: JM Financial has set a target price of ₹264 for NALCO shares, indicating a potential upside of 17% over the next 6 to 12 months.
• Dividends and Bonuses: NALCO has a strong history of shareholder returns, having declared 48 dividends since August 2000. In the last year, the company paid a ₹5 dividend per share, resulting in a current dividend yield of 2.2%. Additionally, NALCO conducted a 1:2 stock split and issued a 1:1 bonus in March 2011.

Overall, NALCO’s strategic growth initiatives and solid financial performance make it an attractive investment option, as highlighted by JM Financial’s endorsement.

Disclaimer: The information provided in this article is for informational purposes only and should not be considered as financial advice. Investment in stocks involves risks, and past performance is not indicative of future results. It is recommended to conduct thorough research and consult with a qualified financial advisor before making any investment decisions. JM Financial’s recommendations are based on their analysis and may not reflect the opinions of all analysts. The author and publisher of this article do not guarantee the accuracy or completeness of the information presented.