NALCO and DECCAN CHRONICLE

NALCO India’s second largest aluminum producer touched its 52 week high of Rs 408 on December 4, 2009 when they join hands with Nuclear Power Corporation of India to invest Rs 1,000 crore to set up five nuclear power plants in the country. NPCIL and Nalco are central public sector undertaking (PSU) under the administrative control of the Department of Atomic Energy (DAE) and Ministry of Mines respectively, and when the power system starts its operation in the next two years the value of the share increases dramatically. NPCIL will contribute 2,160 MW to the nation within the next two years.
With the announcement of IPL auction on 19 jan 2010, of the two new franchises for the 2011 edition at a base price of $ 225 million, Angle Broking believe that the price of Deccan Chronicle stock to get re-rated. In our 2QFY2010 result note, we had valued DCHL on a consolidated basis at 12x FY2011E EPS of Rs12.4 and arrived at a target price of Rs149. Post this development and roll-over to FY2012 E, we upgrade DCHL to a BUY, with a revised target price of Rs216.