Is Natl. Aluminium overvalued or undervalued?

As of 21 April 2025, the valuation grade for National Aluminium has moved from very attractive to attractive, indicating a shift in perception regarding its investment potential. Based on the analysis, the company is currently undervalued. The PE ratio stands at 6.57, significantly lower than its peer Hindalco Industries, which has a PE of 8.8, and also below the industry average, highlighting a potential mispricing in the market. Additionally, the EV to EBITDA ratio of 4.05 further supports this undervaluation compared to peers like Hindalco and Manaksia.
With a robust ROCE of 30.99% and a dividend yield of 5.31%, National Aluminium demonstrates strong operational efficiency and returns, making it an attractive investment opportunity. Despite a recent underperformance compared to the Sensex on a year-to-date basis, where it returned -11.03% against the Sensex's 5.59%, the long-term performance over 5 years shows a remarkable return of 480.59%, suggesting that the stock may be poised for recovery.