Nalco could correct for next few month

Dipan Mehta, Member, BSE/NSE is of the view that Nalco could correct for next few month.

Mehta told CNBC-TV18, “I think that Nalco and other metal stocks move in tandem with commodity prices abroad and companies like Nalco have very little control over the price of what they produce. So in that respect, I think you should expect some amount of volatility in earnings and therefore on the stock price, of most commodity companies including Nalco.”

He further added, “Par se not positive on the outlook for Nalco, on account of the fact that even for the current fiscal one should not expect significant volume growth. Volume growth if at all is going to start kicking in only in FY09 when some of the expansion plans go on stream. So you could look at Nalco moving sideways or correcting for the next few months but more positive on other commodity shares, for example, steel where we are seeing that after several months of prices being depressed, there is some strength coming in over there and the consolidation in the industry is something which will clearly benefit all players worldwide. So if one wants to be in commodities and in metals, the preference has to be for steel rather than alluminium.”