'Hold' Nalco Shares Maintains Systematix Post Q1 Results — Check Target Price

Nalco’s 1mt fifth stream alumina refinery is now expected to be commissioned in June 2026, versus its original commissioning date of April 2021. Additionally, Nalco is expanding its value-added portfolio with a new 100 ktpa wire rod mill at an estimated capex outlay of Rs 2.5-3 billion capex, and aluminium foil manufacturing line entailing Rs 500–600 million capex (1,000 tons/month capacity).

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Systematix Report

National Aluminium Company Ltd.’s fifth stream 1mtpa alumina refinery expansion project faces additional delays after almost 53 months of overrun and a cost overrun of about 38%.

Pending certain work packages, the refinery is now expected to be commissioned in Q1 FY27, with commercial production expected to start by June.

We assume 25% capacity utilisation on the expanded capacity in FY27 versus 50-60% management guidance. Nalco currently sells around 1.3mt alumina externally through third-party exports after meeting the smelter requirement of around 0.9mt.

We project Nalco to deliver external alumina sales of 1.25mt/1.57mt for FY26/FY27.

We revise our FY26/FY27 Ebitda higher by 13%/4% factoring in-

1. higher aluminium LME prices,

2. higher alumina sales for FY26, and

3. moderate utilization of the expanded alumina capacity in FY27.

We value Nalco five times FY27E EV/Ebitda, with a revised target price of Rs 206/share. Maintain Hold.

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