NALCO- A High Potential ValueBagger CMP 35

October 27, 2019

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Strategic Alpha

National Aluminium Company Limited (NALCO) is a Navratna CPSE under the Ministry of Mines. }It was established on 7th January 1981,
integrated and diversified operations in mining, metal, and power. }The Company registered a record net profit of Rs 1732 crore in 2018-19, which is the highest in a decade, and sales turnover of Rs 11386 crore in the financial year 2018-19, which is the highest since inception. } Presently, the Government of India holds 51.5%. }One of largest integrated Bauxite-Alumina-Aluminium- Power Complex in the Country. }The Company has a 68.25 lakh TPA Bauxite Mine & 21.00 lakh TPA (normative capacity) Alumina Refinery located at Damanjodi in Koraput district of Odisha, and 4.60 lakh TPA Aluminium Smelter & 1200MW Captive Power Plant located at Angul, Odisha. }NALCO has bulk shipment facilities at Vizag port for the export of Alumina/Aluminium and import of caustic soda and also utilizes the facilities at Kolkata and Paradeep ports.

Numbers- The Latest

Market Cap:  5,671 Cr. Current Price:  30.40

52 weeks High / Low  56.85 / 24.40 Dividend Yield: 15.4 %

Face Value:  5.00 Debt to equity: 0.01

Promoter holding: 51.50 % Net worth  11400 Cr. }

FCF 5years:  3,636 Cr. Sales growt 10Y: 8.48 % Return on assets: 15.58 %

Dividend Darling

 

With a Minimum 30% Dividend Payout, If the story plays out as per my thesis, then we will be getting:-
}Worst Case:- 8-9 Rs from 2020-2025 in terms of dividend on investment of 30 Rs. 30% of Money will be returned back
}Base Case:-14-15 Rs from 2020-2025, I.e 50% of the investment.
}Bull Case:- 45-50 Rs from 2020-2025, i.e 150% of the investment amount.

Hugh Delta in Margins, a heaven stock for people understanding investing in cyclical stocks

Worst NPM in 2019-20= 2.8%Best NPM in 2008= 32%

 

SADSADSA

Commodity Cycle to Turn Positive and Will benefit the investor of lowest cost manufacturer

The author of the blog Mr.Suyog Dhavan is a Full-time Investor / Value Trader and Value investing/Trading Mentor. His style of Investing is inspired by Mohnish Pabrai, Peter Lynch, and Porinju Veliath. He is the founder of Strategic Alpha Wealth, A Premier stock market mentorship firm with a mission to touch the lives of 1Lakh people through its mentorship program.

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