MOSL: NALCO (Buy)-Alumina destocking and prices drive strong perf.-Valuations attractive
nalco: Alumina destocking and prices drive strong perf.; Valuations attractive; Maintain BUY
(NACL IN, Mkt Cap USD2.1b, CMP INR73, TP INR128, 75% Upside, Buy)
- NALCO’s 4QFY18 adj. EBITDA increased 35% QoQ (47% YoY) to INR6.3b (est. INR3.8b). The beat is on account of destocking of inventories and strong prices of alumina. EBITDA is adjusted for provision of INR1.4b in wage bill towards fluctuation in actuarial calculations. Adj. PAT increased 34% QoQ/38% YoY to INR3.7b.
- For the full year FY18, EBITDA increased 54% to INR16.6b driven by increase in sales tonnage of 9% for metal and 3% for alumina, increase in prices by 21% for LME and 43% for alumina, partially offset by 20% jump in wage bill, inflation in coal and other inputs. Adj. PAT increased 37% to INR9.7b.
- Alumina: production increased 10% QoQ (-1% YoY) to 566kt, while sales jumped 72% QoQ (-9% YoY) to 440kt (est.353) on destocking. Average realization was down 2% QoQ to USD413/t (est USD350).
- Aluminum: production inched up 1% QoQ/11% YoY to 112kt. Average product premium was subdued at USD190/t.
National Aluminium is engaged in the manufacture and distribution of aluminum related products and in the generation of electricity. Co.'s aluminum products include bauxite, zeolite, alumina hydrate, special grade hydrate, calcined alumina, special grade alumina, aluminium standard and sow ingots, aluminium wire rods, aluminium billets, aluminium strips and rolled products.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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