Mumbai: February 5, 2026 – National Aluminium Company Limited (NALCO), India's leading aluminum producer, held its earnings conference call on January 30, 2026, discussing the company's third quarter and nine-month financial performance ending December 2025.
Key Financial Highlights
9-Month Performance (April-December 2025)
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Revenue Growth: 13% increase compared to same period last year
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Expenditure Growth: Only 6% increase despite revenue growth
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EBITDA Margin: Increased by 20%
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Profit Before Tax (PBT): Increased by 25%
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Volume Growth: Alumina production up 20%, metal production up 3.5%
Quarterly Performance
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PAT: ₹2,131 crore in Q3 FY2026 vs ₹2,121 crore in Q3 FY2025
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Revenue Increase: ₹200 crore quarter-on-quarter
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Minimal Expenditure Rise: Only ₹60-70 crore increase
Operational Highlights
Production & Sales Volume
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Alumina Sales: Increased by 45% in 9M FY2026
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Metal Sales: Increased by approximately 5%
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Alumina Production: Target of 2.25-2.3 million tons for FY2026
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Metal Production: Expected to reach 472,000 tons (above rated capacity of 460,000 tons)
Price Dynamics
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Alumina Price Decline: From average $562 to $385 (9-month average)
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Negative Impact: ₹1,652 crore due to alumina price fall
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Aluminum Price Increase: From $2,538 to $2,867
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Positive Impact: ₹781 crore from metal price rise
Management Commentary
Shri Brijendra Pratap Singh, CMD, NALCO:
"Both physical and financial performance has been strong, with the main reason being the increase in volume of production. Despite reduction in alumina prices, we maintained profitability through increased volumes and better efficiencies."
Critical Insights from Q&A Session
Alumina Sales Strategy
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Shipment Mix: 3 spot shipments + 1 LME-linked shipment per month (30,000 tons each)
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Q4 Outlook: Similar 75-25 spot vs LME mix
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Long-term Contracts: Exploring 1-3 year contracts for new refinery output
New Refinery Updates
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Commissioning: Starting June 2026, stabilization expected in 3-4 months
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FY2027 Production: Realistic target of 300,000 tons (vs earlier 500,000 tons)
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Total Investment: ₹5,000 crore spent, additional ₹500-600 crore required in FY2027
Cost Management
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Caustic Soda Efficiency: Consumption reduced from 121 kg to 99 kg per ton
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Savings: ₹129 crore despite price increase from ₹39,000 to ₹45,000 per ton
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Employee Cost: Reduced by ₹118 crore due to retirements and accounting adjustments
Aluminum Production Cost
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Current COP: ₹150,000-₹160,000 per ton (integrated with captive alumina)
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Q4 Outlook: Slight increase expected due to rising input costs
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Power Dependency: Less than 5% grid power, 95%+ captive power
Expansion Plans
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Smelter Expansion: 500,000 tons capacity addition by December 2030
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Current Progress: Consultant appointment for DPR expected June-July 2026
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Capex Plan: ₹1,700 crore for FY2026, ₹1,800-₹2,000 crore for FY2027
Strategic Initiatives
Critical Minerals Extraction
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Red Mud Processing: MoU with NML Jamshedpur (2-year pilot project)
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Gallium Extraction: MoU with BARC for Bayer's liquid processing
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Lithium Mining: KABIL JV (40% NALCO stake) exploring Argentina mines
Input Cost Management
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Captive Coal: 4 million tons production target, ₹200-₹250 per ton cheaper than external coal
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CP Coke Prices: Expected increase from ₹42,764 to ₹54,600 per ton in Q4
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CT Pitch: Increase from ₹51,000 to ₹53,000 per ton
Market Outlook
Aluminum Price Forecast
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Q4 FY2026: Expected around $3,000
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FY2027: Average $2,900 anticipated
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Current LME: Approximately $3,200
Alumina Market Conditions
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Supply Glut: Excess capacity from Indonesian refineries
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Demand Constraints: Thailand smelting capacity capped at 45 million tons
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Price Pressure: Expected to continue through FY2026
Financial Strategy
Hedging Policy
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Current Status: No hedging implemented
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Future Consideration: May consider for FY2027-28 during major capex phase
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Reasoning: Strong balance sheet with no cash flow commitments currently
Dividend & Capex Balance
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Strong Cash Position: Enables simultaneous dividend payouts and expansion funding
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Growth Focus: Balanced approach between shareholder returns and capacity expansion
ESG & Sustainability
Environmental Initiatives
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ETICS Technology: Through Bolix subsidiary in Poland/UK
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Energy Efficiency: Focus on reducing carbon footprint
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Waste Utilization: Red mud processing for critical minerals
Risk Factors
Geopolitical Concerns
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Middle East Tension: Affecting January 2026 alumina shipments
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Export Challenges: Only 2 shipments in January vs normal 4
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Recovery Plan: Targeting February-March to compensate
Market Risks
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Alumina Price Volatility: Continued pressure from oversupply
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Input Cost Inflation: Rising CP coke and caustic soda prices
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Currency Fluctuations: Exchange rate impact on export realizations
Investment Thesis
Strengths
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Integrated Operations: Full value chain from mining to metal
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Cost Leadership: Among lowest cost aluminum producers globally
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Capacity Expansion: Clear roadmap for growth
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Government Backing: Navratna status with strong support
Growth Drivers
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Volume Expansion: Both alumina and metal capacity increases
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Operational Efficiency: Continuous improvement in techno-economic parameters
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Diversification: Critical minerals and new product lines
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Export Opportunities: Growing international presence
Forward Outlook
NALCO remains well-positioned to capitalize on growing aluminum demand while managing alumina market challenges through operational excellence and strategic expansions. The company's focus on volume growth, cost optimization, and strategic investments in new capacities and technologies provides a solid foundation for sustained growth.