Nalco’s growth streak hits speed bump on price slide, project delay fears

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 realizations and cost savings, even as sales Volumes Dipped Slightly. Realization for alumina surgged 73% and aluminum 33%.

Also read: Q4 Results Impact: Nalco Shares Jump Over 5% in Weak Market as Q4 Profit More Than Doubles

Q4 Revenue Increased By 47% to 5,300 Crore. While The Chemicals Segment (Compressing of Alumina Business) Volumes Declined by 7% to 0.35 Million Tonnes (MT), Aluminum 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 for26 Looks Less Promising. Global aluminum prices are under pressure, with lme aluminum prices dropping over 10% month-on-month in April. Weakening Demand in China and Restarts at Us Smelters are hurting price.

Alumina, too, has cooled off. Management Expects Q1Fy26 Price 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 aluminum with its plants running at close to full capacity utilization.

Also read: As Price Advantage Peters out for Nalco, Can New Capacity Bring Comfort?

The company is also Experiencing Project Execution Challenges, with the Commission of its 1 million tonne tonne per annum (MTPA) Alumina Refinery No. Delayed Untiil June 2026, Pusheded BACK FROM The orrti December Schedule. This plant, once operational, will boost its alumina refining capacity by Nearly 50%. On a positive note, all necessary cleanses for the associateed bauxite mine have been secured, allowing production to commence as soon as the refinery is online.

Nevertheles, the path is not rosy.

Long-term hopes

“In the long run, nalco’s aggressive expansion plans with a total capes of 30,000 Crore Cold 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 Deem Outlook for Aluminum in India, The Near-Term Upside is Capped by Potential Price Corrections in Alumina, LimitD Producted Production Headroom, ON-ONE-OME 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 consensusus. Investors Will Be Watching Aluminum Price Trends and Project Progress Closely in the Months Ahead.

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