State-run National Aluminium Company (Nalco) has reported its best-ever quarterly performance, with margins crossing 51%, and has guided for EBITDA (earnings before interest, taxes, depreciation, and amortization) margins of 40-45% for the full year.
During an interview with NDTV Profit, Chairman-cum-Managing Director Brijendra Pratap Singh attributed the record quarter to production efficiencies and firm metal prices.
"Whatever we had targeted in production and efficiencies, we achieved in the quarter. We have achieved best-ever bauxite production, best-ever calcined alumina and aluminium production, quarterly best-ever production," he said, adding that the price of aluminium had also supported the company's profitability.
On the outlook for the year, Singh said the commissioning of Nalco's new refinery would add further momentum.
"When we start our new refinery, around 2 lakh tonnes of alumina production will be taken from the refinery. That will increase our revenues and profitability," he said, adding that the company was targeting a 40-45% EBITDA margin for the year, in line with the previous year.
Singh said Nalco was aiming for 5-10% growth in metal production and over 10% growth in alumina production compared with last year, when the company produced around 23 lakh tonnes of alumina.
On pricing, Singh said alumina prices, which averaged $340-350 in the June quarter against an initial estimate of $320-330, had since risen further.
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"In July, if you see July alumina prices, we are getting around $370," he said, adding that prices were expected to stay above $350 for the rest of the year amid supply constraints at refineries in China and Russia.
He pegged average LME aluminium prices for the year at around $3,100, within an expected range of $3,000-3,200.
On capital expenditure, Singh said Nalco planned to spend Rs 1,500-1,800 crore this financial year, with mechanical completion of its fifth-stream refinery targeted by September-end and commissioning to begin from October.
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Larger capex tied to smelter and captive power plant expansion, he said, would follow from FY28 onwards, once detailed project reports are finalised.
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