EPS downgrade on higher coal costs: Largely due to the recent 30% price increase by Coal India effective Feb-11. NALCO sources ~90% of its coal requirement from Coal India.
Valuations: EPS estimates for FY11 and FY12 to Rs 4.3 (vs. Rs 5.5) and Rs 6.2 (vs. Rs 8.3) respectively to factor in higher cost of production, particularly power. Maintain SELL with target price of Rs 76. Target price implies a downside of 22% from CMP of Rs 98.
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