Stock in Action - National Aluminium

Highlights

1. National Aluminium's share price has gained over 67% year to date in 2024, making it one of the top performers in the Indian market.

2. National Aluminium's financial performance has grown over the past year.

3. National Aluminium's quarterly earnings report highlighted a decline in net profit in the June quarters reaching ₹601Cr in June.

4. For National Aluminium's stock analyst forecasts positive trends for the future.

5. National Aluminium's share price moved from ₹170 to ₹230 between September to October 2024.

6. National Aluminium stock has outperformed the market, delivering a positive return of over 128% in the past year.

7. National Aluminium is currently trading at ₹227 showing a 4.74% increase as of 12:04 am on NSE.

8. The company has set a budget of ₹2,000 crore to ₹2,500 crore for investments and upgrades in the coming year.

9. Analysts have recommended a buy call on National Aluminium.

10. As per the September quarter filings the company has a 51.28% promoter holding, 19.29% DII holding and 12.08% foreign institutional investor (FII) holding.

Why is National Aluminium in the News?

Shares of National Aluminium Company jumped 5.5% on Thursday, 17 October performing well despite a weak market where most stocks were down.

Several factors are driving NALCO's rise. First, China’s Housing Minister announced steps to revive its real estate sector including plans to fund urbanization projects. Although local real estate stocks weren’t impressed by the lack of big announcements, NALCO benefitted.

Another key reason was the strong earnings report from Alcoa, the world’s largest aluminum producer. Alcoa’s stock rose 6% after posting its best quarterly results in three years, due to lower costs and higher alumina prices. Alcoa's Earnings Per Share (EPS) beat expectations by 138%. The company expects the aluminum market to remain tight for the next 6-9 months and forecasts even better profits in the fourth quarter.

NALCO’s management expects alumina prices to stay around $600 per tonne and aims to increase alumina production to 2.6 million tonnes by 2026 and 3.1 million tonnes by 2027 from its current rate of 2.1 million tonnes. The company also plans to invest between ₹2,000 crore and ₹2,500 crore in the year ahead.

The China Factor

China, which produces about half of the world's aluminum has kept up with record production levels helping ease concerns about global supply. According to a report by Shanghai Metals Market (SMM) China may continue this high production in the fourth quarter. Meanwhile rising global demand for aluminum especially from electric vehicle and solar cell manufacturers is expected to keep prices high.

Additionally, efforts by China to stimulate its housing market and boost economic growth are likely to have a positive impact on metal prices.

National Aluminium Financial

National Aluminium Co's net profit for the first quarter of the current financial year saw a significant increase of 76% rising to ₹588 crore compared to ₹334 crore in the same quarter last year. Despite this strong growth the profit fell short of analyst’s expectations. Experts had predicted a higher profit of ₹741.4 crore for the quarter.

Conclusion

National Aluminium Company is making headlines due to its impressive share price increase of over 67% year to date and a recent 5.5% surge despite a weak market. Driven by positive trends such as strong earnings from Alcoa and China's real estate initiatives, NALCO's management is optimistic about alumina production growth and stable pricing. Despite a net profit rise of 76% to ₹588 crores in the last quarter the company's earnings missed analysts' expectations. With a budget of ₹2,000 to ₹2,500 crore for future investments and strong analyst recommendations, NALCO is well positioned for continued growth amid rising global aluminum demand.