Healthy Dividend Yield Stock – National Aluminium Company – Fundamental Analysis
National Aluminium Company (NALCO India) is a Public Sector Company headquartered in Odisha, India. The Company is also seen as the Navratna CPSE of the Govt of India. It’s business is based on Aluminium Production – Bauxite Mining, Aluminium Refining, Smelting and Casting. It is also engaging in the Power Generation, Rail and Port process.
NALCO India is said to be the country’s Largest Company in the Aluminium Industry and the world’s leading supplier with the low cost production. It is worth noting that the revenue are also came from Exports.
The Market Capitalization of the company is around Rs. 6,300 Crore. The Book value is at 55 rupees. The Current Stock price to earning (PE) is said to be 20 times. The Current market price to book value is attractive, which is less than a time.
NALCO India is generally a Debt Free company, where the current debt to equity ratio were stood at 0.01. Interest Coverage Ratio (ICR) is also comes with 100 Times. The Current dividend yield is around 7 Percent, which is good at compared to Bank Deposits and Bonds.
Promoters Holding is about 52 Percent and there is no pledging on Promoters side, which is seeing as a Good Fundamentals. By this Sector, most of the peer companies are trading at a cheaper price, but it’s a Risky one to note that these sector are generally affected by the Global Factors – Aluminium Industry.
Over the Past 5 years, the Sales growth have seen 11 Percent growth and the Compounded Profit growth was 24 Percent. The Return on Equity is good of 17 Percent for the past one year. However, the Stock price have corrected around 37 Percent over the past 12 months.
As per FY2018-19, the Revenue was Rs. 11,499 Crore and the operating profit was Rs. 2,893 Crore. Other income was said to be Rs. 173 Crore in the end of FY19 and the Net Profit were stood at Rs. 1,732 Crore. In the Fiscal year 2019-20, it failed to make profits in the Q2 and Q3 report. The Q4FY20 is yet to be announced.
The Reserves in the Balance Sheet are healthy and the Cash Flow seems as Positive. There is a risk with this Sector as the Global economy factors will change from time to time. At the Same time, it is said to be one of the best in the Public Sector Enterprises. This company fulfills the basic Fundamentals, even the stock price were not much appreciated. Such type of shares can be added some value for the Long term investment.
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