NATIONALUM Q2 FY26 earnings call.
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Revenue
₹4,292 Cr
verified against source
Revenue YoY
7.27%
reported change
EBITDA
Pending
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
NALCO reported best-ever Q2 and H1 FY26 performance with production and financial metrics exceeding prior year. Q2 revenue from operations grew 7.27% YoY while PAT surged 34% YoY, driven by 15% higher alumina production and 13% increase in bauxite excavation. H1 showed even stronger momentum with 18% revenue growth and 50.2% PAT growth YoY. Volume expansion contributed ~INR 700 crore and operational efficiency another ~INR 300 crore to H1 performance versus last year. The 5th stream alumina refinery expansion is 78% complete with June 2026 commissioning targeted, expecting 500,000 tons production in FY27. Smelter expansion DPR is underway with ~INR 30,000 crore total CapEx planned through 2030. Alumina prices have softened to $320-340 in H2 from Q2's $380, though management expects $350+ historically in Q3-Q4. Key risks include alumina price volatility, Indonesian refinery capacity additions pressuring spot prices, and upcoming bauxite mine lease renewals with uncertain royalty terms. The company holds INR 7,900 crore cash providing ample funding for expansion.
Colored figures show movement against the previous available record.
Guidance to track
- New 1 million ton capacity refinery (5th stream) to commission June 2026 with 2-3 month ramp-up to 60-70% utilization in FY27.
- Full capacity utilization expected in FY2028 with ~800,000 tons production (80% utilization over 12 months).
- H2 alumina sales guidance of 600,000-650,000 tons to achieve full year target of 1.25-1.3 million tons.
- Consultant for DPR (both CPP and smelter) to be appointed this month with DPR completion in 6 months, board approval targeted June-July 2026.
Risks flagged
- 2-3 new alumina refineries started in Indonesia along with smelter capacity reductions in China and other regions have increased alumina availability, creating sustained price pressure below $350.
- Central block of Panchpatmali bauxite mine lease expires in 2029 with uncertain royalty terms upon renewal. Government may impose additional premiums similar to iron ore (150% extra) though clarity on bauxite is lacking.
- Term contracts currently yield ~$350 while spot prices are $310-320, creating ~$30-40/ton execution risk. Management prefers 50-50 term/spot split but market timing is challenging.
- Critical packages (precipitation tanks, hydrate filtration, calcination, evaporation) remain in 20% pending work. Any further delays could push June 2026 commissioning beyond target.
Key quotes
- The major contributor, if we see H1 compare H1 of 2024-2025 and 2025-2026, has been the increase in volumes. Our alumina volume has increased substantially. The increase in volume has given us around INR 700 crore, and efficiency has given us around INR 300 crore.
- We are not expecting to further increase (caustic soda cost). It may slightly go down or remain at the same level.
- Whatever our cost of production of alumina will be there, we will be getting at least we'll be having a positive margin. Minimum, we'll be getting a INR 10,000 plus margin per ton in our export market or in the domestic market.
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