1 NATIONALUM share price target reports by brokerages below. See what is analyst's view on NATIONALUM share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
Higher cost and lower realization impact performance Alumina prices have come under pressure recently due to the restart of Hydro’s Alunorte refinery, weak aluminum LME prices and muted demand.Prices have fallen below their margin cost of production of ~USD350/t, and thus, we believe that there is scope for prices to recover.We cut our FY20 estimate for alumina price from USD355/t to USD340/t and for average LME price from ~USD1,861/t to ~USD1,804/t. Our FY20/21 EBITDA estimate is lowered by 32%/12% to INR10.8/INR14.5b. We believe alumina/aluminum LME prices are close to bottom as, at the current levels, ~10% of global smelters/refiners (particularly Chinese) would be in cash losses. NACL is best placed to benefit from higher prices. We value the stock at 5x FY20E EV/EBITDA. Our TP stands at INR50/share. Maintain Buy.
Disappointment in the form of higher cost of production. NACL’s performance was impacted by alumina prices coming off their recent highs and fixed cost absorption being lower due to reduced volumes. We expect volumes to improve, which should drive down CoP, but the alumina benchmark prices have fallen further as Chinese supply is rising. We cut our alumina price estimate from USD400/t to USD350/t for FY20-21. Spot alumina is at ~USD365/t. We have also marginally cut aluminum product premiums and increased CoP. EBITDA estimate is cut by ~27-29% to ~INR16b and PAT by ~30% to ~INR10b for FY20-21. We believe alumina/aluminum LME are close to bottom as, at the current prices, ~20-30% of global smelters/refiners (particularly Chinese) would be in cash losses. NACL is best placed to benefit from higher prices. We value the stock at 6x (earlier 5.5x) FY20E EV/EBITDA at INR69/share. Maintain Buy.
Wages eroding its strategic advantages; valuations attractive We have changed INR/USD assumption by 7%, which has been partially offset by reduction in LME assumption. As a result, estimate for EBITDA has increased by 16%/12% to INR33.1b/28.4b for FY19/FY20E. Stock is trading at attractive valuations i.e. EV/EBITDA of 3.4xFY20E and P/E of ~7xFY20E. We value the stock at INR107/share based on 5.5xEV/EBITDA for FY20E.
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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