Valuation Metrics and Recent Changes
As of the latest assessment, NALCO’s price-to-earnings (P/E) ratio stands at 11.56, a figure that, while still elevated compared to historical averages, indicates a moderation from previously very expensive levels. The price-to-book value (P/BV) ratio is currently 3.56, signalling that the stock trades at a premium to its net asset value, but this premium is consistent with the company’s strong return on equity (ROE) and return on capital employed (ROCE).
The enterprise value to EBITDA (EV/EBITDA) ratio is 7.39, which is attractive within the non-ferrous metals sector, suggesting that the company’s operating earnings are reasonably valued relative to its enterprise value. Additionally, the PEG ratio is exceptionally low at 0.10, indicating that the stock’s price growth is not outpacing earnings growth, a positive sign for value-conscious investors.
Strong Operational Performance Supports Valuation
NALCO’s latest ROCE is an impressive 64.86%, while its ROE stands at 30.82%, both metrics well above industry averages. These figures highlight the company’s efficient capital utilisation and profitability, justifying the premium valuation multiples. The dividend yield of 2.73% further adds to the stock’s attractiveness, offering a steady income stream alongside capital appreciation potential.
Despite a day change of -10.32%, the stock’s long-term performance remains exceptional. Over the past year, NALCO has delivered a staggering 99.17% return, vastly outperforming the Sensex’s 7.18% gain. Over five and ten years, the stock has returned 703.13% and 1015.07% respectively, dwarfing the Sensex’s corresponding returns of 77.74% and 230.79%. This outperformance reflects the company’s strong fundamentals and market positioning within the non-ferrous metals sector.
Price Movement and Market Context
The current market price of ₹384.70 is down from the previous close of ₹428.95, with intraday trading ranging between ₹379.85 and ₹416.00. The 52-week high is ₹431.60, while the low is ₹140.00, indicating significant price appreciation over the past year. This recent correction may present a buying opportunity given the company’s solid financial health and growth prospects.
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Comparative Valuation and Peer Analysis
Within the non-ferrous metals industry, NALCO’s valuation remains on the expensive side, but this is tempered by its superior operational metrics. The company’s EV to EBIT ratio of 8.08 and EV to capital employed of 5.24 are competitive, reflecting efficient earnings generation relative to enterprise value and capital base. When compared to peers, NALCO’s valuation multiples are justified by its higher ROCE and ROE, which indicate better capital efficiency and profitability.
The MarketsMOJO valuation grade has shifted from “very expensive” to “expensive,” signalling a more balanced price level relative to earnings and book value. This adjustment suggests that while the stock is not undervalued, it is no longer excessively priced, improving its appeal for investors seeking quality mid-cap exposure in the metals sector.
Mojo Score Upgrade and Market Sentiment
Reflecting the company’s strong fundamentals and improving valuation, MarketsMOJO has upgraded NALCO’s Mojo Grade from “Buy” to “Strong Buy” as of 11 Nov 2025. The Mojo Score stands at a robust 80.0, underscoring confidence in the stock’s growth trajectory and risk-reward profile. The market capitalisation grade remains at 2, indicating a mid-cap status with significant growth potential.
Despite the recent price correction, the upgrade signals positive sentiment among analysts and investors, who view the current valuation as attractive given the company’s earnings power and sector outlook.
Investment Outlook and Risk Considerations
Investors should note that while valuation multiples have moderated, NALCO still trades at a premium relative to book value and earnings. This premium is supported by the company’s high returns and dividend yield, but it also implies expectations of continued strong performance. Market volatility, commodity price fluctuations, and sector-specific risks remain factors to monitor.
However, the company’s track record of delivering returns well above the Sensex over multiple time horizons provides a compelling case for long-term investors. The current price dip may offer an opportune entry point for those looking to capitalise on NALCO’s growth potential within the non-ferrous metals industry.
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Conclusion: Valuation Adjustment Enhances Price Appeal
National Aluminium Company Ltd’s recent valuation adjustment from very expensive to expensive marks a significant development in its investment narrative. The moderation in P/E and P/BV ratios, combined with strong operational metrics such as a 64.86% ROCE and 30.82% ROE, supports a more attractive price point for investors. The company’s exceptional long-term returns relative to the Sensex further reinforce its status as a high-quality mid-cap stock within the non-ferrous metals sector.
While the stock has experienced a short-term price correction, the upgrade to a Strong Buy rating by MarketsMOJO and the robust Mojo Score of 80.0 highlight confidence in NALCO’s future prospects. For investors seeking exposure to a fundamentally strong company with reasonable valuation multiples and solid dividend yield, NALCO presents a compelling opportunity in the current market environment.
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