NALCO Neutral; Target Price: Rs 400 Motilal Oswal
NALCO's Q4FY26 Performance Reflects Favorable Aluminum Prices
National Aluminium Company Limited (NALCO), a leading aluminium producer, has reported its financial results for the fourth quarter of fiscal year 2026 (4QFY26). The company's revenue for the quarter stood at INR50.1 billion, marking a decrease of 5% year-over-year (YoY) and an increase of 6% quarter-over-quarter (QoQ). This growth can be attributed to favorable aluminum prices.
Consolidated Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) and Margin
Consolidated EBITDA for the quarter stood at INR23.5 billion, which is lower than our estimated INR26.4 billion. However, the EBITDA margin for 4QFY26 was 46.9%, showing a slight improvement from 46.1% in the previous quarter (3QFY26) and 52.3% in the same quarter of the previous fiscal year (4QFY25).
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
Outlook and Valuation
At the current market price (CMP), NALCO trades at an enterprise value to EBITDA (EV/EBITDA) multiple of 7.5 times. Based on this valuation, we reiterate our Neutral rating on the stock and revise our target price to INR400, which values the company at 7.5x EV/EBITDA on estimated earnings for fiscal year 2028 (FY28).
| Financial Metric | 4QFY26 | 3QFY25 | 4QFY25 |
|---|---|---|---|
| Revenue (INR billion) | 50.1 | 47.4 | 48.3 |
| YoY Change | -5% | ||
| QoQ Change | +6% | ||
| Consolidated EBITDA (INR billion) | 23.5 | 21.7 | 26.5 |
| YoY Change | -15% | -12% | |
| QoQ Change | +8% | ||
| EBITDA Margin (%) | 46.9 | 46.1 | 52.3 |
Investor Takeaway
Investors should consider NALCO's neutral rating and revised target price of Rs 400.
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