NATIONALUM - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.6

National Aluminium Company Ltd. (NATIONALUM) stands out as a highly efficient and undervalued player in the metals sector with stellar profitability, nearly debt-free balance sheet, and strong dividend potential.

🧾 Core Financials Snapshot

ROCE: 44.0% and ROE: 32.7% — outstanding returns, positioning it among top capital-efficient companies in its industry.

EPS: ₹28.7 — robust, bolstered by strong net income.

Qtr Profit Var: +203% — explosive quarterly earnings growth; likely driven by favorable commodity pricing and margin expansion.

PAT Qtr: ₹2,067 Cr. vs. ₹1,566 Cr. (Prev) — solid upward trajectory in profitability.

Debt-to-equity: 0.01 — virtually debt-free, indicating financial resilience in cyclic downturns.

Dividend Yield: 4.22% — high yield, appealing for passive income investors.

💹 Valuation Metrics

Metric Value Comment

P/E Ratio 6.62 Deeply undervalued, far below industry average of 17.7

P/B Ratio ~1.96 Reasonable given high asset backing

PEG Ratio 0.31 Signals attractive growth at low price

Book Value ₹97.0 Offers a strong margin of safety

Intrinsic Value Likely higher Undervaluation backed by earnings strength and asset base

Verdict: The stock trades well below its intrinsic value, making it a classic value buy.

🏗️ Business Model & Competitive Edge

National Aluminium is a government-backed PSU with vertically integrated operations in bauxite mining, alumina refining, and aluminium smelting.

Strengths include

Low-cost production base

Strategic control over raw materials

Strong export presence and domestic demand linkage

Advantage: Benefiting from rising aluminium demand globally due to EV, solar, and infrastructure push.

Risks: Commodity price volatility, global competition, and environmental regulation changes.

📉 Technical Overview

RSI: 49.1 — neutral zone, suggests stock is neither overbought nor oversold.

MACD: 1.56 — mildly bullish signal.

Price is slightly above DMA 50 & 200 (₹187–₹186) — indicates supportive consolidation area.

Volume is slightly below average but holding steady — potential for breakout if accumulation builds.

🎯 Entry Zone & Investment Outlook

Suggested Entry Range: ₹180–₹190 — favorable risk-reward zone near major moving averages.

Holding Recommendation

Ideal for medium to long-term holding (2–3 years).

Attractive for value investors and those seeking high dividend yield and low volatility.

Strong candidate for core allocation in commodities + public sector themes.

Monitor global aluminium price trends and PSU disinvestment cues for upside potential.

Curious to see how NATIONALUM stacks up against Hindalco or Vedanta for a broader metals strategy? I can help you smelt some clarity. 🪙🔥

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