SBI Securities picks this Navratna PSU stock for up to 15% upside; check target price

Navratana PSU stock to buy: On Wednesday (July 10), Indian stock markets began trading with slight increases. The Sensex began at 80,481.36, up 29.72 points or 0.16 per cent, and the Nifty opened at 24,459.85, up 26.65 points or 0.11 per cent.

At 1.23 PM, the Sensex was down 551 points (0.69 per cent) at 79,800.61, while the Nifty was down 154 points (0.63 per cent) at 24,279.20.

Meanwhile, brokerage SBI Securities has recommended buying navratna PSU stock National Aluminium Company Limited (NALCO) from a long-term perspective.

NALCO share price target

The brokerage suggests buying NALCO shares for 12 months. It has given a target of Rs 234 each. This means the stock has a potential upside of 15 per cent from its last closing price.

Today at 1.04 PM IST, NALCO shares are trading 3.14 per cent lower at Rs 197.7 each on BSE.

NALCO is one of the largest integrated Bauxite-Alumina-Aluminium-Power complexes in India. The company has been operating its captive Panchpatmali Bauxite Mines for the pit head Alumina refinery at Damanjodi in Odisha and the Aluminium Smelter & Captive Power Plant at Angul. It has its bulk shipment facility for the export of products.

Brokerage's views on NALCO

"NALCO is an integrated aluminum producer encompassing mining ore to metal. It is one of the lowest-cost producers of alumina," says the brokerage,

"The company has executed a mining lease deed with the State Government of Odisha on June 13, 2024, over an area of 697.979 hectares for Bauxite mines in Pottangi. NTPC has also signed a non-binding MoU with NALCO to supply about 1,200 MW or more of round-the-clock uninterrupted power to cater to the requirement of NALCO for its expansion of smelter plant capacity in Angul, Odisha. The brownfield alumina expansion of 1 mtpa is currently on track and is expected to
commission in 2HFY26 with a full ramp-up in FY27. Additional alumina volume will assist in higher topline from FY26 onwards. The aluminum smelter expansion of 0.5 mtpa is also planned over the next few years. At the current price, the stock is trading at 10.6x/8.6 of its FY25E/FY26E EV/EBITDA based on Bloomberg consensus estimates," said the brokerage.

However, the key risk factors include lower LME aluminium prices and regulatory risk.

NALCO's share price history

In one year, NALCO shares have provided returns of almost 137 per cent while the company's shares have jumped over 165 per cent in two years. The stock has given returns of 45 per cent on a YTD basis and over 50 per cent in the last six months. The 52-week high of the stock was Rs 209.6 and the 52-weeks low was Rs 83.1. NALCO's current market capitalisation is Rs 36,310 crore.

Disclaimer: The views/suggestions/advices expressed here in this article are solely by investment experts. Zee Business suggests its readers consult their investment advisers before making any financial decision.