National Aluminium Co., like its name suggests, has primarily been a manufacturer and seller of alumina and aluminium. In fact, its one of the largest integrated bauxite-alumina-aluminium-power complex in India and one of the largest integrated primary producers of aluminum in Asia.
However, 57.5% and 42% of the company's operating profit in Q3 FY25 and 9M FY25, respectively, came from the chemical business.
Nalco's Revenue Segments
National Aluminium Co. has two major business segments:
Chemicals: This segment includes calcined alumina, alumina hydrate and other related products.
Aluminium: This segment includes aluminium ingots, wire rods, billets, strips, rolled and other related products.
Chemicals Lead Q3 Revenue Growth
The company's third quarter results showed strong growth. Its revenue increased 39% year-on-year to Rs 4,662 crore, while its Ebitda and net profit more than tripled to Rs 2,327 crore and Rs 1,566 crore, respectively on an annual basis.
While the company's aluminium segment's revenue did see a 12% uptick, it was the company's chemical business that led growth this quarter, with a 78% increase in segmental sales. The chemical segment contributed 49% to Nalco's total revenue this quarter, against 38% a year ago.
But it was the chemical segment's operating profit that saw a huge turnaround to Rs 1,287 crore, compared to just Rs 217 crore a year ago.
Factors That Helped Nalco's Chemical Business In Q3
As per National Aluminium Company's Chairman and Managing Director, Brijendra Pratap Singh, the company's third quarter chemical business benefited due to two factors.
The first was the order bookings made by the firm in October and November 2024, when alumina prices were at high levels of $800. This helped the segment's revenues.
The second was improved efficiencies that led to overall fall in total costs. Nalco saw a fall in raw material expenses, as well as power costs due to higher use of captive coal.
Will Chemical Business Strength Continue?
While higher alumina prices in the third quarter benefited the company's chemical segment, the same may not be the case in FY26. Singh told NDTV Profit that impact of lower alumina prices will be limited in the fourth quarter, since the bookings were done at similar prices seen in third quarter.
The actual impact of lower alumina prices will be seen in the quarters after.
FY25 Guidance
Singh expects to close fiscal 2025 with a top-line of around Rs 15,000 crore, marking a 14% uptick in consolidated revenues on an annual basis.
Ebitda margin level guidance stands between 35%-40%, compared to 22% seen in fiscal 2024.
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