Buy National Aluminium Co; target of Rs 385: Prabhudas Lilladher

What happened

Prabhudas Lilladher upgraded National Aluminium Co. to Buy from Accumulate and cut its target price to INR385 from INR392, using the same 5-times EV/EBITDA valuation. In Q2FY27, EBITDA, a measure of operating earnings, rose 25% year on year to INR24.1bn.

Confirmed

Global impact / market context

The report links higher input and energy costs to limited improvement in quarterly profitability, despite stronger metal volumes and alumina prices. If costs stay near first-half levels, savings from lower fuel use and operational efficiencies will matter; improved alumina realizations could also support earnings if expected demand absorbs excess supply.

Analyst inference

The report says the share price had fallen more than 15% over three months amid geopolitical uncertainty and concerns about MENA smelters restarting. It expects aluminum prices to hold at current levels, while rising smelter use could absorb excess alumina and lift realizations.

Confirmed

What to watch

1. Check whether raw material and power and fuel costs remain near first-half levels, as management expects, and whether lower fuel use and operating efficiencies provide relief in the second half. Confirmed
2. Watch for MENA smelter utilization to increase and absorb excess alumina, which the report expects could improve second-half realizations to US$370–380 per tonne. Proposed
3. Track whether export dispatch disruptions ease: alumina volumes fell 14% year on year, and restored shipments could help sales recover, though the report gives no timing. Analyst inference

Evidence

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