National Aluminium Company Ltd (Nalco) delivered a knockout performance in FY25, but the metals major now finds itself staring at storm clouds in FY26 as aluminium prices soften and project delays weigh on future capacity.
Nalco reported consolidated Ebitda (earnings before interest, taxes, depreciation, and amortization) of ₹2,755 crore in Q4FY25, a 150% year-on-year rise, marking its third straight quarter of triple-digit profit growth. The jump was driven by higher product realisations and cost savings, even as sales volumes dipped slightly. Realisation for alumina surged 73% and aluminium 33%.
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Q4 revenue increased by 47% to ₹5,300 crore. While the chemicals segment (comprising of alumina business) volumes declined by 7% to 0.35 million tonnes (mt), aluminium rose by 5% to 0.13 mt. That lifted segmental Ebit by 152% and 206%, respectively.
For the full year, revenue and Ebitda rose 28% and 165% to ₹16,800 crore and ₹7,565 crore, respectively.
Clouds over FY26
Despite the blockbuster FY25, the outlook for FY26 looks less promising. Global aluminium prices are under pressure, with LME aluminium prices dropping over 10% month-on-month in April. Weakening demand in China and restarts at US smelters are hurting prices.
Alumina, too, has cooled off. Management expects Q1FY26 prices to average $400 per tonne—down from $590 in FY25. Consequently, Ebitda margin is expected to fall to 36–37% in FY26, from 46% last year.
Nalco kept costs in check, with FY25 employee expenses dropping 12% due to reduced headcount. Material and energy cost savings also aided profitability. Coal production from its captive mines rose to 2.8 mt, expected to touch 4 mt in FY26—helping save ₹400 per tonne.
But, production volumes remain flat: 2.1 mt alumina and 0.45 mt aluminium with its plants running at close to full capacity utilisation.
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The company is also experiencing project execution challenges, with the commissioning of its 1 million tonne per annum (mtpa) alumina refinery now delayed until June 2026, pushed back from the original December schedule. This plant, once operational, will boost its alumina refining capacity by nearly 50%. On a positive note, all necessary clearances for the associated bauxite mine have been secured, allowing production to commence as soon as the refinery is online.
Nevertheless, the path is not rosy.
Long-term hopes
“In the long run, Nalco’s aggressive expansion plans with a total capex of ₹30,000 crore could significantly enhance production capacity. However, with the completion timeline of FY30, execution risks and cost escalations remain key concerns,” said analysts from Motilal Oswal Financial Services in a report on 22 May.
“Despite strong fundamentals, zero debt, and a robust demand outlook for aluminium in India, the near-term upside is capped by potential price corrections in alumina, limited production headroom, on-time execution challenges, and regulatory risks,” they added.
Nalco’s shares are down about 13% so far in 2025, and trade at an enterprise value of 5.9x its FY26 Ebitda estimates, as per Bloomberg consensus. Investors will be watching aluminium price trends and project progress closely in the months ahead.
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