NATIONALUM Fundamental Analysis | P/E, ROE & Financial Health

Fundamental Rating: 4.4

Stock Code	NATIONALUM	Market Cap	65,180 Cr.	Current Price	354 ₹	High / Low	432 ₹
Stock P/E	10.6	Book Value	109 ₹	Dividend Yield	2.96 %	ROCE	43.7 %
ROE	32.6 %	Face Value	5.00 ₹	DMA 50	322 ₹	DMA 200	249 ₹
Chg in FII Hold	3.45 %	Chg in DII Hold	-3.10 %	PAT Qtr	1,601 Cr.	PAT Prev Qtr	1,433 Cr.
RSI	51.0	MACD	22.2	Volume	4,21,14,669	Avg Vol 1Wk	3,38,48,548
Low price	138 ₹	High price	432 ₹	PEG Ratio	0.49	Debt to equity	0.00
52w Index	73.7 %	Qtr Profit Var	1.14 %	EPS	33.6 ₹	Industry PE	28.8

📊 Core Financials

Revenue & Profitability: Quarterly PAT improved from 1,433 Cr. to 1,601 Cr. (+1.14%), showing steady earnings growth. EPS at 33.6 ₹ reflects strong profitability.

Margins: ROCE at 43.7% and ROE at 32.6% highlight excellent efficiency and shareholder returns.

Debt: Debt-to-equity ratio of 0.00 indicates a debt-free balance sheet, strengthening financial resilience.

Cash Flow: Dividend yield of 2.96% provides attractive shareholder returns, supported by strong cash generation.

💹 Valuation Indicators

P/E Ratio: 10.6 vs Industry PE of 28.8 → Undervalued compared to peers.

P/B Ratio: Current Price (354 ₹) / Book Value (109 ₹) ≈ 3.25 → Reasonable valuation given strong fundamentals.

PEG Ratio: 0.49 → Attractive, suggesting growth potential relative to price.

Intrinsic Value: Current price appears below fair value, offering upside potential.

🏭 Business Model & Competitive Advantage

National Aluminium Company (NALCO) operates in aluminium production and mining, benefiting from strong domestic demand and global commodity cycles.

Debt-free operations and high return ratios provide resilience against cyclical downturns.

Government backing and integrated operations enhance competitive advantage.

📈 Entry Zone & Long-Term Guidance

Entry Zone: Attractive accumulation range between 320 ₹ – 340 ₹, closer to DMA 200 support levels.

Long-Term Holding: Strong fundamentals, undervaluation, and debt-free status make NATIONALUM suitable for long-term investors. Staggered buying recommended to manage commodity cycle risks.

✅ Positive

Debt-free balance sheet ensures financial stability.

High ROCE (43.7%) and ROE (32.6%) highlight efficiency.

P/E ratio significantly below industry average, indicating undervaluation.

Dividend yield of 2.96% provides attractive income.

FII holding increased by 3.45%, showing strong foreign investor confidence.

⚠️ Limitation

Quarterly profit growth (+1.14%) is modest, showing limited near-term momentum.

P/B ratio of 3.25 indicates premium pricing relative to book value.

DII holding decreased by 3.10%, reflecting reduced domestic institutional support.

📉 Company Negative News

DII holding decreased by 3.10%, showing reduced domestic institutional confidence.

Profit growth remains modest despite strong fundamentals.

📈 Company Positive News

Quarterly PAT rose from 1,433 Cr. to 1,601 Cr.

FII inflows (+3.45%) highlight strong foreign investor interest.

Debt-free operations and strong dividend yield support shareholder value.

🌐 Industry

Aluminium and mining sector benefits from infrastructure growth and rising global demand.

Industry PE at 28.8 suggests NATIONALUM trades at a discount, offering potential upside.

🔎 Conclusion

NATIONALUM demonstrates strong fundamentals with debt-free operations, high return ratios, and attractive dividend yield. Despite modest profit growth and reduced DII support, the stock remains undervalued compared to peers. Investors may consider entering around 320–340 ₹ for long-term holding, with staggered buying to manage commodity cycle risks. The company is well-positioned to benefit from India’s infrastructure growth and global aluminium demand.

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NATIONALUM - Fundamental Analysis: Financial Health & Valuation

Rating: 4.4