Nalco - Avoid

Nalco:

Though most metal and mineral players are affected by the slowdown in demand and increase in input costs, analysts don't recommend players like the National Aluminium Company (Nalco). The recent 30% price increase by Coal India is going to hit Nalco because it is the primary source of coal for the latter.

The international coal prices have also shot up recently. Another problem is with regard to its alumina expansion plans in Orissa, which is expected to come on track in only in the second quarter of 2011-12. "Since the alumina price is high now, the company is losing this opportunity. On the valuation front too, it is expensive compared with its peers," says Tarang Bhanushali, AVP, research, India Private Clients, IIFL.

Our Recommendation :

The stock has a monthly high / low of Rs.83 and Rs.93

Traders with risk appetite can buy around 83 levels and sell on keeping a strict stop loss of Rs. 79

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