National Aluminium Company Limited (NALCO) Reports Strong Q4 Growth
State-run enterprises in India, such as National Aluminium Company Limited (NALCO), have reported an over-the-top surge in their financial performance in Q4FY2022. The company’s net income more than doubled to Rs 996.7 crore from Rs 495 crore in the same quarter last year – a growth of 101.5% over the same quarter.
Although income from operations declined marginally to ₹3,579 crore as compared to ₹3,671 crore in the same period last fiscal as a result of the lockdown, the company still significantly improved its profitability. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of the agency jumped 44.5% to ₹1,107.5 crore, with an EBITDA margin of 30.9%, against 20.9% in the corresponding period previous year.
The progressed margins can be attributed to an extensive discount in uncooked fabric charges, especially thermal coal and bauxite, which might be important for aluminium manufacturing. NALCO’s general costs for the quarter decreased by 22% to ₹2,720.42 crore, mainly because of lower raw cloth costs.
For the overall monetary 12 months 2023-24, NALCO achieved a consolidated net profit of ₹1,988 crore, reflecting a 38.6% increase from the previous year’s ₹1,434.66 crore. However, the organisation’s general revenue for the year declined by 7.5% to ₹13,399.86 crore, down from ₹14,490.49 crore in the prior fiscal year.
Operationally, NALCO achieved record-breaking figures in several areas. The company reported its highest-ever bauxite excavation at 76,00,230 metric tonnes, highest-ever cast metal production of 4,63,428 metric tonnes, and highest-ever metal sales of 4,70,108 metric tonnes. Additionally, NALCO produced 2 million tonnes of coal in the first year of operationalizing its coal mines.
Business diversification through inorganic investments on an opportunistic basis to improve its long-term view remains a key priority for NALCO. The company is in the process of various expansion projects, such as the construction of a fifth stream in the alumina refinery, the commissioning of Pottangi bauxite mines, the brownfield expansion of the smelter plant, and the proposed brownfield expansion of the captive power plant. These efforts are designed to boost production and raw material security.
Brokerage firms have a positive outlook on NALCO’s improved financial performance and strategic initiatives. Axis Securities has retained its ‘Buy’ rating on NALCO with the stock, focusing on the company continuing to operate at the highest-ever growth level on its refining and smelting front. The brokerage firm has set a price target of ₹215, factoring in recently increased aluminium and alumina prices.
In conclusion, NALCO’s impressive Q4 results, supported by improved operational execution and cost control, position the company for continued growth in the aluminium industry. With ongoing enlargement projects and strategic diversification efforts, NALCO objectives to strengthen its marketplace role and supply long-term value to its stakeholders.
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