Sell NALCO, target of Rs 149: Indiabulls Securities

ndiabulls Securities Research has downgraded its rating from hold to sell on National Aluminium Company with a target price of Rs 149 in its February 24, 2009 research report. "National Aluminium Company Limited (NALCO) reported a weak set of numbers in Q3�9, mainly on account of lower sales due to declining demand. Net sales fell 6.6% yoy to Rs 10.4 billion because of a 14.9% yoy decline in the aluminium sales volume to 75,000 tonnes. EBITDA plunged 39.7% yoy mainly on account of higher input costs. We do not expect aluminium prices to bounce back in the upcoming quarters, given the rising inventory levels on the LME and the falling demand." "Based on DCF valuation, we have arrived at a target price of Rs 149 (assuming a 16.8% WACC and a 5% terminal growth rate). Since our target price provides a downside potential of 25% from the CMP, we have downgraded our rating from Hold to Sell," says Indiabulls Securities' research report.