National Aluminium Co. Ltd, India’s leading aluminium manufacturer and a Maharatna PSU, has witnessed excellent Q3 results for the fiscal year 2024-25, driving up its shares to new highs against the tide of the falling market. It also declared a high 3-fold net profit for the quarter that ended in December 2024 and declared a dividend of ₹4 per share, which shall be shared among the shareholders. The news brought cheers to investors as NALCO shares hiked nearly by 4 per cent in early morning trade on Tuesday, February 13, 2025. This gives an idea of how despite the general down drift in the market, the performances and outlook for NALCO have impressed investors.
NALCO Q3 Results: Shines Bright
NALCO yesterday reported a remarkable rise in both its revenue and net profit in Q3 FY25, which indicates strong business performance. Notably, the company’s net profit multiplied threefold to reach ₹1,583 crore in the third quarter of FY25 from ₹488 crore in the same period of the previous year. Notably, the major drivers behind this were better realization through sales, market demand, and effective cost management strategies.
NALCO’s total income for the October-December 2024 quarter stands at ₹4,761 crore, a growth of 39% year over year from ₹3,398 crore in Q3FY24. However, these numbers do underscore the strength of the company’s operational performance, buoyed by strategic improvements in various areas of its business.
The financial year to date (April to December 2024) has also been a standout for NALCO, with the company registering a 211% increase in net profit, which reached ₹3,246 crore, compared to ₹1,044 crore during the same period in FY24. Revenue from operations for the nine months stood at ₹11,520 crore, reflecting a 20% growth from the previous fiscal year’s ₹9,570 crore.
Several factors account for these stellar performances: Sales realization improvement of the company on alumina and metal, improving sales volumes in alumina, better utilization of captive coal, and reduced raw material costs all played a vital role in profit making in Q3FY25.
Key drivers for NALCO’s success in Q3:
Chairman and Managing Director Brijendra Pratap Singh said that a series of strategic reasons had gone in favour of the company for such a strong performance in Q3. The most important factors among them are:
- Process Efficiency: NALCO has optimised its processes at all locations of operations which led to enhanced production as well as reduced costs.
- Reducing Input Costs: The company could reduce the input costs of operations, thereby increasing the efficiency of operations.
- Enhancement in Product Quality: To maintain its competitive edge in the market, the company is keen on enhancing the quality of the products produced by it.
- Sales Realization: Sales realization grew for both alumina and metal. The increase in alumina sale volumes would be the primary reason behind the growth.
- Captive Coal Utilization: Through better utilization of captive coal, NALCO has managed to reduce energy costs to a great extent, thereby having a very aggressive impact on the bottom line.
Expansion Plans: Growth in the Pipe Lines
Future forward, NALCO is targeting the completion of critical expansion activities, which is going to lead to further growth. The major initiatives include:
- 5th Stream Expansion of Refinery: The company is also expanding the operations of the refinery, enhancing the production capability, and therefore the demand for aluminium will also increase.
- Developing Pottangi Mines: NALCO is also engaged in developing the Pottangi Mines, through which it can maintain a continuous supply of bauxite for the production of aluminium.
- Brownfield Expansion of Smelter Plant: NALCO is expanding its smelter plant in a brownfield manner. The expansion will improve the aluminium-producing capacity of NALCO and further strengthen its market position.
- Planned CPP Expansion: It is also planning to expand the captive power plant (CPP) to ensure an uninterrupted and economical source of power for its operation.
- NALCO Dividend Declaration: In addition to the good quarterly results, NALCO has also declared a second interim dividend of ₹4 per share for the financial year 2024-25. The company’s Board of Directors approved the dividend on February 10, 2025, and the shareholders can expect payment on or before March 10, 2025.
The dividend payout amounts to 80% of the face value of the equity shares, which are priced at ₹5 each, and hence, the total dividend payout will be ₹73.47 crore. Shareholders holding NALCO shares on the record date of February 14, 2025, will be eligible for the dividend payment.
Position of NALCO in the Market
NALCO, being a Navratna company, is the largest aluminium-producing company in India. It has played a crucial role in the aluminium industry of the country. It has focused on increasing production capacity, operational efficiency, and enhancing product quality to maintain leadership in the industry.
With huge investments in infrastructure and a very aggressive expansion strategy, NALCO is destined to benefit further from increasing demand from companies involved in construction, automobile, and renewable energy companies. With strategic control over the costs accompanied by strategic investments in organic and inorganic growth opportunities, the company is seen as one of the strong contenders in the Indian aluminium sector.
a) Performance on the Stock Market
Despite a broader stock market decline, NALCO shares have shown resilience, rising nearly 4% following the positive Q3 results and dividend announcement. The stock has garnered interest from investors due to its strong fundamentals, consistent performance, and strategic expansion plans.
The stock of NALCO has gone up steadily in the last few months with industry-friendly conditions and a solid financial track record. NALCO is trading at ₹198 per share, significantly higher than its 52-week low of ₹126.10, indicating strong investor confidence in the company’s long-term prospects.
b) Investor Sentiment and Market Outlook
Generally, market analysts remain optimistic over NALCO due to its Q3 report where the firm reported strong numbers and a renewed focus on expansion. So, while the broader market was volatile NALCO’s success continues to speak volumes as far as growth goes, and here’s why.
Analysts should expect the company’s strong fundamentals, robust pipeline of expansion projects, and favourable market dynamics for aluminium to continue to fuel the stock’s growth. In any case, the market has always been sensitive to macro factors such as commodity prices, inflation, and general global economic conditions, which in the short run may affect its performance.
Conclusion
NALCO’s Q3 results and dividend declaration are a testament to the company’s strong operational performance and growth trajectory. The company’s focus on process efficiency, cost management, and strategic expansion has allowed it to maintain a competitive edge in the aluminium industry.
With a leading market position and pro-active growth initiatives along with investor-friendly initiatives such as dividend payouts, NALCO will go on to be very relevant in the years ahead. Investors and stakeholders will therefore have ample reasons to keep an eye on the company’s ongoing projects and expansion activities, which will significantly shape its future performance.
In summary, the positive financials of NALCO along with its expansion plans and dividend announcement have strengthened the company’s position in the market. NALCO, continuing to focus on growth and profitability, is one of the strongest contenders in the Indian aluminium sector, with upside potential for long-term investors.
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