Investors looking for opportunities on the Nigerian Exchange (NGX) may be wondering if NASCON Allied Industries Plc presents an attractive buy in 2025. NASCON, a key player in Nigeria’s food manufacturing sector, is primarily known for its refined salt business, although the company has diversified into seasoning and vegetable oil production. The release of its FY 2024 financial results offers a timely opportunity to assess its investment prospects.
Solid Revenue Growth in a Difficult Economy
Despite Nigeria’s tough macroeconomic environment in 2024, NASCON reported robust revenue growth, closing the year with ₦74.52 billion in revenue, up from ₦58.79 billion in 2023 — a strong 26.7% year-on-year increase. This performance reflects resilient demand for essential consumer products like salt and seasoning, categories that tend to be relatively recession-proof.
Profitability Holds Up — But Margins Squeezed
However, NASCON’s profit after tax (PAT) stood at ₦4.67 billion, only a modest improvement over the ₦4.58 billion recorded in 2023. The company faced rising input costs, driven by currency depreciation, higher energy prices, and persistent inflation in raw material costs. As a result, profit margins contracted, with net profit margin sliding to 6.3% from 7.8% in 2023.
This highlights a key risk, NASCON’s exposure to imported inputs means its cost base is vulnerable to further naira devaluation and supply chain disruptions.
Dividend Declared — Attractive Yield for Income Investors
One factor that will appeal to dividend-focused investors is NASCON’s ₦1.00 per share dividend payout, maintaining the same level as in 2023. Based on the company’s current share price of around ₦37 (as at early March 2025), this translates to a dividend yield of approximately 2.7%. While this is decent for the Nigerian market, it is not particularly high compared to other dividend stocks in the consumer goods sector, such as Nestlé Nigeria or Dangote Sugar.
Valuation — Reasonably Priced Compared to Peers
At a Price-to-Earnings (P/E) ratio of around 11x (based on FY 2024 earnings), NASCON is fairly priced compared to sector peers, especially given its stable earnings profile and the essential nature of its products. However, for investors seeking strong growth catalysts, the stock might lack excitement — NASCON is mature, and its growth outlook largely hinges on gradual price increases and potential efficiency gains rather than breakthrough innovation or aggressive expansion.
What’s the Verdict?
For income-focused investors, NASCON offers a reliable dividend and exposure to a defensive consumer product segment.
For growth-oriented investors, the stock’s upside is limited unless the company aggressively expands its product lines or enters new markets.
The key risks — including foreign exchange volatility and high input costs — make it a moderate-risk play rather than a safe haven.
Overall Recommendation: Hold/Speculative Buy
At current prices, NASCON is a reasonable buy for investors seeking steady dividends and defensiveness. However, those looking for higher capital appreciation may find better opportunities in fast-growing sectors like technology, financial services, or even industrials.
What to Watch in 2025:
Naira stability and impact on input costs.
Potential product line expansions or efficiency improvements.
Further regulatory changes affecting the food manufacturing sector.
Bottom Line: NASCON isn’t a bad buy, but it’s not a screaming bargain either — it’s a safe bet for steady returns, not a rocket ship for aggressive growth.
