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Nalco: OPM jumps over 600 bp

Nov 2, 2000

National Aluminium has posted a 68% rise in net profits for the quarter ended 30th September 2000. The company has benefited from better operating margins and a rise in other income.

(Rs m) 2QFY00 2QFY01 Change
Sales 5,243 6,193 18.1%
Other Income 279 397 42.2%
Expenditure 3,187 3,291 3.3%
Operating Profit (EBDIT) 2,056 2,902 41.2%
Operating Profit Margin (%) 39.2% 46.9%  
Interest 222 238 7.4%
Depreciation 702 714 1.7%
Profit before Tax 1,411 2,346 66.3%
Other Adjustments - -  
Tax 367 596 62.4%
Profit after Tax/(Loss) 1,044 1,750 67.7%
Net profit margin (%) 19.9% 28.3%  
No. of Shares (eoy) 644.3 644.3  
Diluted Earnings per share* 6.5 10.9 67.7%
*(annualised)      
P/e ratio 6.5 3.9  

We have projected a full year growth of 14% in turnover and 18% in profits. Our bottomline estimates do not seem to be in line mainly due to the fact that Nalco has yet to take into account higher interest and depreciation expenditure on account of the commissioning of its enhanced alumina capacity later this year. Indeed we have projected the depreciation and interest expenditure to rise by 29% and 41% respectively.

At its current price of Rs 42 the stock trades at a P/e multiple of 3.9x on annualised 2QFY01 earnings.


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