Buy Nalco; target of Rs 42: Motilal Oswal

Motilal Oswal 's research report on Nalco

Nalco (NACL) surprised with higher-than-expected EBITDA at INR1.29b (est.: INR81m), led by cost reduction in the Aluminum business. However, it was down 33% YoY due to lower prices and volumes. -We raise our FY21 EBITDA estimate by 67% to factor recovery in LME prices, but maintain FY22 estimates. Maintain Buy.

Outlook

We value the stock at 5.5x FY22E EV/EBITDA to arrive at TP of INR42. Buy.