Result Update: NALCO - BUY - TP Rs.100 - Kotak

NALCO's 3QFY18 performance, was lower than estimates at operational level, due to increase in gratuity liability. Net sales during the quarter grew 20.2% YoY to Rs23.89 bn (down 2.7% QoQ). EBITDA during the quarter was up 20.5% YoY and 2.5% QoQ to Rs3.44 bn, with an EBITDA margin of 14.4%. PAT came in at Rs7.22 bn (higher than estimates) due to write back of excess liability pertaining to the disputed water charges. Alumina segment continued to report strong numbers. However, the benefit of the same is offset by weak performance in aluminium segment. Aluminium segment reported EBIT loss of Rs910.9 mn, due to rise in input costs. We continue to maintain our positive stance on aluminium price trajectory and China supply side reforms and believe that, NALCO stands to gain due to integrated business model. We have revised our FY18E and FY19E estimates to Rs5.8 (earlier Rs6.4) and Rs7 (earlier Rs8) and introducing FY20 with an EPS of Rs7.3. At CMP, stock trades at 4.8x/4.4x FY19E/FY20E EV/EBITDA. We maintain BUY, with a target price of Rs100

Shares of NATIONAL ALUMINIUM CO.LTD. was last trading in BSE at Rs.69.95 as compared to the previous close of Rs. 75.2. The total number of shares traded during the day was 797702 in over 7480 trades.

The stock hit an intraday high of Rs. 71.9 and intraday low of 69.3. The net turnover during the day was Rs. 56301495.

Source : Equity Bulls

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