Normally one expects private sector to do well over public sector firms
However Nalco-Hindalco seems to be one anomaly.
| Metrices | NALCO | HINDALCO |
|---|---|---|
| 1 Year ROCE | 15.1% | 11.3% |
| 3 Year ROCE | 20.6% | 12.2% |
| 7 Year ROCE | 15.8% | 10.5% |
| 10 Year ROCE | 14.4% | 8.92% |
| P/B 10 Year Average | 1.1 | 0.9 |
| P/B 5 Year Average | 1.1 | 1.1 |
| Current P/B | 2.1 | 1.1 |
| 10 Yr Sales growth CAGR | 8% | 11% |
| 5 Yr Sales growth CAGR | 8% | 14% |
| 3 Yr Sales growth CAGR | 19% | 24% |
| TTM Sales growth | -11% | -3% |
| 10 Yr Profit CAGR | 11% | 14% |
| 5 Yr Profit CAGR | 17% | 16% |
| 3 Yr Profit CAGR | 124% | 38% |
| TTM Profit growth | -24% | -20% |
Sales growth wise Hindalco has been better than Nalco over all the periods analyzed; however Profit wise Nalco has started outperforming over last 5 Years; What caused this? Since Novelis acquisition was in 2007, that cant be responsible for the bad performance of Hindalco.
Cost value chain would comprise Raw material Procurement, Production and Distribution.
Where might Nalco be performing better than Hindalco?
Price wise Nalco is almost twice its historic P/B valuation, while Hindalco is at its historic valuations.
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