Sell NALCO, target of Rs 150: PINC Research
PINC Research has recommended a sell rating on National Aluminium Company (Nalco) with a target price of Rs 150 in its April 6, 2009 research report. “Aluminium prices have plummeted 60-65% from a high of USD 3,400/mt.
A similar decline has been witnessed in alumina as well, which is a key contributor to Nalco’s profitability. Going forward we expect the pricing pressure to exist and dampen Nalco’s profitability. The aluminium industry is sailing through rough waters as prices have collapsed 60% to USD 1,400/mt, from peak of USD 3,400/mt. The current financial crisis has resulted in a bleak global outlook, causing significant reduction in commodity prices, with aluminium being no exception. We estimate a price target of Rs 150, which comes at a P/E of 10x FY10E core EPS of Rs 11.4 and cash/share of Rs 45. We recommend a ‘SELL’ on the stock,” says PINC’s research report
Tags: nalco, pinc, sell, sell rating, stock call
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