‘Dividend yield attractive’: Brokerages bullish on metal stocks below ₹100

“We remain positive on NALCO given the strong alumina and aluminum price outlook (supported by European smelter shutdowns, projected global losses amid laudable sanctions on Russian aluminium, decelerating Chinese exports), integrated business model and attractive dividend yield. NALCO sells ~1.3 MT of alumina and ~0.4 MT of aluminum annually and is well positioned to benefit from their strong prices. An additional 1 MTPA alumina along with captive coal mining and caustic soda production will bring about margin expansion and cost reduction,” the note said.

The brokerage house likes its integrated business model with captive bauxite, alumina, captive power and maintains estimates but with buy rating NALCO SHARE with a target value of 99 per share.

High margin of safety with high cash levels and attractive dividend yield: cash and cash equivalents estimated at the end of FY23 46 billion, which is 30% of its current market capitalization. dividend yield It remains attractive at the 6% level, leading to a high margin of safety.

“Lowering e-auction premium from 2QFY23 record levels confirmed by higher coal production in Coal India will be supported by higher linkage coal availability and lower coal cost. According to Antique Stock Broking the mining activities for Utkal-D captive coal block is expected to start from 4QFY23 and operation of caustic soda plant (through JV) in Gujarat will help in raw material security and lower cost.

The views and recommendations given above are those of individual analysts or broking companies and not of Mint.