Motilal Oswal - National Aluminium (NATIONALUM) MOSL: NALCO (Buy)-Robust quarter on lower costs, strong volumes

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Motilal Oswal

EUR 120.00 For Business Accounts Only

MOSL: NALCO (Buy)-Robust quarter on lower costs, strong volumes

nalco: Robust quarter on lower costs, strong volumes; Cutting estimates to factor in alumina/LME price decline; Maintain Buy

(NACL IN, Mkt Cap USD1.3b, CMP INR50, TP INR65, 27% Upside, Buy)

EBITDA of INR5.2b (-10% QoQ) was 42% ahead of our estimate due to (a) lower power & fuel costs (-22% QoQ) and (b) higher alumina volumes (we assume to have come in at 380kt). The sequential decline in EBITDA can be attributed to lower alumina/LME prices. Adj. PAT was down 7% QoQ at INR3.2b (our estimate: INR2.1b).

Alumina: Production rose 4% QoQ to 561kt. Assuming alumina realizations of ~USD350 (avg. 4Q prices), sales growth stands at 30% QoQ to 380kt.
Aluminum: Production increased 2% QoQ to 111kt, while sales were up 13% QoQ to 117kt. Realizations declined 9% QoQ to USD2,075/t on account of lower LME prices. CoP decreased 11% QoQ to USD1,842/t due to lower fuel costs and scale benefits.

03/06/2019 1 EN

Underlying

National Aluminium

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.

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INE139A01034 National Stock Exchange of India India

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Motilal Oswal

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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MOSL: NALCO (Buy)-Robust quarter on lower costs, strong volumes

NATIONAL ALUMINIUM loses on its star level and is downgraded to Slightly Positive

Monthly LMI Update Independent Investment Research

MOSL: NALCO (Buy) 4QFY21: Beneficiary of higher aluminum prices

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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