Brokerage firm InCred has raised an alarm on National Aluminium Co Ltd. (NALCO), stating that the metal producer may be heading into a tougher phase with the reduced enthusiasm in the commodity market, especially aluminium.
This turn in market sentiment has prompted InCred to downgrade NALCO rating to 'reduce' from 'hold', even as it raised the stock's target price to Rs 302 from Rs 176. The current share price of the stock is Rs 348.95.
In its latest note, the brokerage said peak aluminium prices don't bode well for its Indian operations, referring to a challenging environment for the state‑run metal producer. The firm also flagged concerns around the timing of NALCO's planned alumina expansion, stating that it is coming in at a time when prices are falling.
Aluminium prices traded lower at Rs 308.75 per kilogram in futures trade on Monday, as participants reduced their exposure, tracking weakness in the overseas markets. On the Multi Commodity Exchange (MCX), aluminium for February delivery slipped 50 paise, or 0.16%, to Rs 308.75 per kilogram in a business turnover of 3,099 lots. The weakness in aluminium futures was largely influenced by a soft trend in global rates and tepid demand from domestic consuming industries.
InCred expects the company's operating performance to weaken over the next two years. It projects EBITDA to drop to Rs 6,170 crore in FY28, down from Rs 7,260 crore in FY26.
Shares of NALCO fell almost 2.23% on Monday, touching an intraday low of Rs 341.50. The stock closed at Rs 348.40.
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