NALCO shares surged by 47% price target by Kotak on attractive risk-reward

Brokerage firm Kotak Institutional Equities has upgraded shares of state-run National Aluminium Company Ltd. (NALCO) to "Add" from its earlier rating of "sell."

New Delhi: The brokerage has also increased its price target on NALCO by 47% to Rs 235 from Rs 160 earlier. The revised price target implies a potential upside of 12% from Monday's closing levels.

Although NALCO's 1 MTPA Alumina refinery expansion is progressing at a slow pace, Kotak is estimating volume contribution from the same in the second half of the financial year 2027.

According to Kotak, NALCO is best placed to benefit from the ongoing supply tightness in the alumina market, given its net long position and the tailwinds in aluminum prices. Commissioning of captive coal mine helped NALCO keep costs down in the previous financial year and a further ramp-up should keep costs on a downtrend, according to Kotak's note.

The brokerage has increased NALCO's Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) estimates by 8%, 11%, and 17% for the financial years 2025, 2026, and 2027 respectively, led mainly by commodity price assumptions.