NALCO shares hit record high after Kotak Equities upgrades rating

NALCO share price: The shares of National Aluminium Company Ltd. (NALCO) have surged as much as 8 per cent after Kotak Institutional Equities upgraded the share rating from ‘Sell’ to ‘Add’ by increasing the target price of the share by 47 per cent to Rs 235 from Rs 160 earlier. 

Shares of NALCO have surged by 22 per cent over the past month, positioning the company to benefit from ongoing supply constraints in the alumina market, according to a report by Kotak. The brokerage highlighted NALCO's advantageous position, noting its net long exposure and the positive impact of rising aluminium prices.

Kotak's report also pointed out that the commissioning of NALCO’s captive coal mine helped the company control costs in the previous financial year, and a further ramp-up of production is expected to maintain this downward trend in costs.

While NALCO’s 1 MTPA alumina refinery expansion is progressing slowly, Kotak anticipates that it will contribute to volumes in the second half of the financial year 2027.

As a result, Kotak has revised its EBITDA estimates for NALCO upward by 8 per cent, 11 per cent, and 17 per cent for the financial years 2025, 2026, and 2027, respectively. This increase is driven primarily by assumptions around commodity prices.

Additionally, the brokerage has raised NALCO’s target multiple to seven times EV/EBITDA, up from the previous 5.5 times. Kotak's note indicated that the current valuations present an attractive risk-reward scenario for the company.