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Our Bureau

Mumbai , Sept. 8

THE stock of Nalco is seen to have sustained buying interest in the recent past. Of late, fund interest in the counter has been gaining ground.

Good fundamentals apart, brokers said that talk of fresh contracts for alumina being at significant higher levels has spurred interest in this counter. Huge positions have also reportedly been built up in the F&O segment.

Analysts maintain that higher volume growth and favourable outlook for the company, has seen the stock of Nalco gather strength on the bourses in the recent past. The fact that Nalco would be a debt-free company in FY05 as cash flows would be utilised for retiring its balance debt of Rs 700 crore is viewed as a definite positive.

Sources maintain that the company's expanded aluminium smelter is expected to contribute to additional volume this year. The company is also awaiting the final nod from the Cabinet Committee of Economic Affairs (CCEA) for its second phase of the expansion plan.

As per reports, the project involves additional 5,00,000 tpa alumina capacity, 1,10,000 tpa aluminium smelter and 2X120 MW captive power plant, involving a capital expenditure of Rs 4,100 crore. The approval for this mega expansion is expected soon. The implementation time for this project is expected to be four years.

According to an Enam Securities report, Nalco's earnings would be driven by higher realisation of alumina, higher aluminium prices and additional aluminium volume. "Spot alumina prices have come down from $500 to $320 per tonne. This was without major transactions and on account of reduced purchase from China. This quarter's spot sale is likely to materialise at higher prices as alumina inventory level in China is exhausted," adds the report.

The stock of Nalco ended at Rs 159.95 up 2.04 per cent with around 3.38 lakh shares traded on the BSE. On the NSE, the stock ended at Rs 159 up 2.11 per cent with around 14.74 lak shares traded.

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