National Aluminium Company Limited (NATIONALUM) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Q4 FY26 and FY26 Earnings Call of National Aluminum Company Limited, Nalco Conference Call, hosted by Systematics Group. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Ms. Shweta Dixit from Systematics Group. Thank you and over to you, Mr. Dixit.

Thank you. Good evening, everyone.

On behalf of Systematics, we welcome you to the Q4 FI26 and FI26 Earnings Conference Call of National Aluminium Company Limited. I would like to thank the management for giving us the opportunity to host this call. I now hand over to Mr. Bharat Sahu, Company Secretary Narko, to discuss the company's financial and operational performance. Over to you, sir.

Thank you. Namaskar. Good evening. Greetings from National Aluminium Company Limited. On behalf of Nalko Collective and specially from Nalko Board, let me welcome all esteemed investors, analysts, fund houses to this earning call hosted by Systematics Group. Today is a historic day for Nalko. The Board of Directors have approved the financial statements for the financial year 25-26, registering the best ever performance in every funds. We have our CMD, Sri Brajant Pratap Singh, along with our other functional directors, Director of Production, Sri Pankaj Kumar Sharma, Director P&T, Sri Jagdish Arora, Director of HR, Dr. Tapos Patmak, Director of Finance, Sri Avey Kumar Bioria, and Director Commercial, Sri Amil Kumar Singh, in this conference call. And presentation on this Q4 and FY26 is already uploaded with the stock exchanges as well as in the company's website and I hope Systematic Group must have also circulated it to all our esteemed investors. And now I request our CMD, sir, to kindly highlight the results and also the outlook of the company.

How about you, sir? Good evening. Good evening to everyone connected over VC. All our directors are present here in this, our boardroom, and our company, Secretary Bharat Sau. Everyone connected to VC along with the systematic groups. Today, we have declared our result, and with a very robust performance of the company, I would like to deliver it on the highlights of the... I would like to deliberate on the highlights, achievements of the organization. This year, we have done best ever physical performance in all the areas, box kite excavation, alumina hydrate production, calcium and alumina production, metal production, net power generation. Wind power generation. And all the areas, the growth is there compared to 25, the actual production of 24-25, bauxite production around 6% growth, hydrate and calcium alumina production around 11.5% growth, cast metal production around 2.61% growth, coal production from our Utkal coal block around 41.84% growth, power generation. From our power units, 4.7% growth, wind power around 9.25% growth. Along with that, our sales performance also has been robust. We have done best ever sales, both in terms of alumina and metal, aluminum metal. Aluminous cells has grown by around 30.74% and metal cells, that is, aluminum cells has grown by around 2.8%. So. All the physical performances in all areas and sales performance has been ever best. Backed by this performance, our financials also, we have done best ever financial performance this year. Last year we had best ever in 24-25 and we have surpassed those figures. Revenue from operation in the year 24-25 was... 16,788 crores, which has gone up to around 17,843 crores, a growth of around 6.28%. EBITDA has grown from 7,922 crores to 8,613 crores, around 8.72% growth. Profit before tax from 7,135 crores to 7,767 crores, around 8.86% growth back. From 5325 to 5816 around 9.22%. So all these financials are also ever best. And all this achievement, what we have done, the two major reasons of this achievement were dedicated and hard work of each and every employee's support of our stakeholders, support of our ministries and government and our physical performance. Best ever physical performance, we have improved not only on the volume, we have improved on the techno-economy figures also, like caustic soda consumption, CP coke consumption, furnace oil consumption, all these areas also lot of savings we have done. So with increase in volumes. Increase in our efficiencies, we have increased our profitability in spite of reduction in the alumina prices. The alumina prices, if we see year on year, around more than $200 has gone down. In the year 24-25, average alumina realization was around $580, which has come down to around $370 this year. Of course, in metal side, the average relation has increased from around 2550 to around 2700 US dollars. So, major highlight is that we have been able to tap our potential, reach to the fullest capacity of our potential, with a good improvement in our techno-economic figures.

Thank you.

Thank you.

We will now begin the question and answer session. Anyone who wishes to ask a question may please press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

The first question is from the line of Aditya Vellekar from Access Securities.

Please go ahead.

Yeah, thanks for the opportunity and congrats for the great set of numbers. So, just wanted to understand on alumina's front, if you can throw any guidance on F527 production and sales volume, both on alumina and aluminium.

Fy27, if you see, our target is our system refinery is coming. So we are planning to add because commissioning will start in June and maybe take 3-4 months to reach to the production level. So this year we are planning, optimistic planning we have done of 2 lakh tons. So around 25 lakh tons of alumina production and sales we are planning. That is around 2 lakhs more than the previous year. And it will further increase as per as the commissioning process goes. As far as the metal production is concerned, metal production, again, we have targeted more than this year, slightly more, because we have already reached to the upper limit. Our capacity is 4.6 lakhs. Last year, we have done around 4.71 lakhs of tons of metal production. This year, we have planned around 4.73 lakhs tons of metal production. So, both areas, in alumina and metal, we have looked for the growth.

So, what is our exposure to Middle East in terms of alumina exports? Is there an impact on the sales volume next year?

Our Elmina export to the Middle East, of course, that was going earlier in the previous year's plot of around 40-50% of our export was going to Middle East, which has got affected. But now from Indonesia and other places also orders are there. Of course, that has resulted into the reduction in the spot prices. The spot prices have gone down to as low as around $310 to $305. That is the effect of the war. So, once this smelters of the Middle East, the production curtailment is there, till they reach to the fullest capacity, there will be effect on the alumina pricing in the spot prices.

Sir, in terms of volumes, any impact on sales volume because of this disruption there?

Sales volume, till now, no. Our volumes, whatever spot tender we are doing, we are getting the orders. In fact, in our last spot tender, we got the order of around 36, the orders we are getting. We are trying to increase our presence in the domestic market also, like last two, around 25, 24, 25, our domestic sales were 40,000 tons. This year, 25-26, we have done around 1,40,000. We have increased the volumes in domestic sales by around 1 lakh. This year, again, we are targeting to further increase, go to around 2.5 to 3 lakh, I think, or something like that. So we are targeting domestic market to further increase the volumes, and we are trying to have some long-term relationship, long-term engagement with metal manufacturers across the globe, so that we have the Uh, uh, uh... Comfortability of selling aluminum to the smelters.

Okay, got it, sir. Thank you. I'll get back to you.

Thank you. The next question is from the Lion of Manav Gogia from Yes Securities Limited. Please go ahead.

Hello. Yes, very good evening, and thank you for the opportunity. First of all, congratulations for the strong year that you've had. So, one question follow-up from the previous participant. Could you give me the average alumina realisation right for the quarter, and how is it shaping up in Q1?

Quarter means which quarter you are asking?

For Q4, what were the average alumina realizations and how was Q1 looking?

Q4, 25, 26. Q4, 25, 26, average relation was somewhere around 3000. Alumina, alumina you are talking or aluminium? Alumina. Alumina, it is $348. $348 was there in Q4.

Okay, and how is Q1 looking? Q1, it was 460.

No, Q1, this is Q1.

Q1, this one is 156.

It will go down, further go down, it is around 320 average we are getting now.

Okay.

Okay, got it.

Okay, sir.

Sir, just one question. Are we, you know, because aluminium price is quite strong, are we doing any, putting any hedges in place or it's going to be directly linked to LME, how we have been doing till now for aluminium?

Hedging we are not doing. It's directly linked to LME. Since LME is in the rise, so that's why we don't require to do any kind of hedging.

Okay, got it. And so for volumes, for alumina, you just stated that, you know, we are going to be doing incremental 2 lakh tons from the new refinery. Earlier, we were targeting 50% utilization, then we had got it down to 30%. Now we are sort of at a 20 to 25% utilization. So, I mean, are we expecting some delays? Or is it, how should we look at it?

In fact, not delays. We were expecting that by June, yeah, some delays will be there. Because we were expecting that by June, we will be completing the total production commissioning process. But in June, we are starting the commissioning process. It may take 2-3 months to complete it. 2 lakh is a very optimistic figure which we are targeting. Maybe it can further go up if the commissioning process is completed early.

Oh, okay. Okay. And my second question would be, you know, where are we in the process for the new aluminium smelter? And how should we take a look at the CAPEX number going ahead for the next two, three years now?

The new aluminum smelter, already we have placed the order for making DPR for both smelter and our power plant. The preparation of DPR is under progress. Technology licensure, already we are appointing. Our target is by this year, maybe September, October, we will be able to complete the DPR, get the board approval, and start the tendering process for procurement, which will take six to seven months. Means next month, next year, April, May, we can complete that ordering and start the actual groundwork. And it will take around three and a half years from there. Our target is by 20, December 2030 or maybe early 2031 to complete the overall commissioning.

Okay, got it. And how does the CAPEX number look for 27 and 28 and where can we see the CAPEX, you know, peaking out?

Capex, like this year, the Capex will not come, but 27-28, the Capex will start coming once the ordering is done. So, Capex will further, Capex will say how much we have done. This year we are targeting around 1800 to 2000, that is 26-27, 27-28 it will go to somewhere around 4000 and similar kind of capex, it will further increase, further increase because our total investment will be around both if we see power plant and this will be around somewhere around 30000. So, that will be phased out in around 3 to 4 years from next year onwards, that is 27, 28 onwards. So, maybe first year will be around 4 to 5,000, next year will further go to around 8 to 10,000 and 28, 29 and 29, 30 will peak out to around 8 to 10,000 somewhere long.

Oh, okay. You got it. Thank you so much, sir. All the very best. I'll join back to queue. Thank you.

Thank you. The next question is from the line of Stanakin from HSBC. Please go ahead.

Thank you very much, sir. First of all, can you give us the alumina and aluminum cost of production in the fourth quarter, and what would it be today in one queue, given the cost of inflation that we have seen?

Now, if you see the cost of production of our alumina and aluminium, alumina, our cost varies from 20,000 to 22,000 in between, okay? And if you are talking about the aluminium, it is 155 to 100, I mean, 1 lux 55 to 1 lux 60, that is right. But the first quarter, the cost will not increase much, though there is some increase in the input cost. But since our men and employees costs are getting down because of the high-paid employees are getting retired and we are recruiting a new one, so whatever extra cost we are including in the input cost, that will be set up by our fixed cost, reduction in fixed cost, employees cost, power and fuel, so there will be much hike in the cost, it will be varying in that range only, within 1 lakh 60 thousand.

So, sir, that's very good to hear, but do you expect that trend to continue in the second quarter as well, because we are saying caustic and fuel oil and carbon prices all rise very sharply?

You are expecting that, what is, suppose there is increase in the caustic and city fees, but we are going to increase coal supply from our captive mines. Our captive mines would call D and E, that will give us some comfort. Whatever cost we will be incurring, input cost outside SOA, that will be to great extent will be compensated the reduction of the power cost, coal cost from our captive mines. Because in the next year we are going to increase production by 8 lakh more. So that comfort we will be getting.

Got it. So my second question is that the Japan aluminum premiums have risen very sharply from just around $100 to nearly $300 per ton. For Nalco's aluminum sales, what were the premiums that the company realized in fourth quarter, and what do you think will be realized now?

Oh no, what? Metal, premium metal. Metal, we have a pricing policy. We don't change frequently the premium part. We have a mechanism of pricing calculation, and we have fixed the premium, I think, six, seven months back. That pattern we are following. So it is linked to the LME, so we don't change our premium frequently. Because that is a transparency policy we are following. So that gives very confidence to the to all of our stakeholders. So we don't link it to the Dappan premium regularly. It is fixed. I think last year it was fixed and that is continuing. We don't say anything.

Do you expect to revise it anytime soon, sir, given that the premiums have risen very sharply across Asia?

Maybe in a month or two, we will be going for export tender and whatever premium we will be getting there. This means we go for export tender within every six months, something like that, and whatever premium we are getting, that we adopt for next six months. We will be going for export tender and whatever premium we get, then we will include in our pricing.

Got it, got it. Thank you very much, sir. This is very, very helpful.

Thank you. The next question is from the line of Kallava Garwals from Antic Stop Broking. Please go ahead.

Yeah, good evening, sir. So, just a question. You mentioned about, you know, sir, the employee costs coming down. But in this particular quarter, you've seen, you know, almost a 13% increase by over and a 26% sequential increase compared to third quarter. So, is there any one-off or any scarcity provisions that were there in this quarter?

You are telling quarter to quarter? Yeah, employee cost.

Employee cost overall of year to year it has gone down. 18% to 15%. Year to year if you see it has gone down. Yes, compared to 24-25. Last year. Financial year, it has gone down by around 65 crores employee cost. Because we have retirement of around 351 people, and we have inducted around 358, but whatever retirement was in the higher pay scale, and the induction is in the lower pay scale.

If we compare the quarter-ticket, some of the provision is being made at the end of the year, actual evaluation, everything. And if you see the overall, 24-25 and 25-26, there is a reduction of 2%. 24-25 our employees cost composition of total expenditure requires 18% and BCR is 16%.

Sure, and we expect this to continue, right? In FY27 also, we don't see material. I think it will continue.

FY27 also further superannuation is by around 250 numbers. And our recruitment will be also similar kind of thing. And superannuating staff is always on the higher pay scale and the people joining are on the lower pay scale.

So similar kind of savings will be there.

Sure, sir. Also, on the other expenses, you know, again, maybe it was the fourth quarter, you know, there's been a significant increase on a wire-wire basis at about 850 crores. So, again, is it some year-end provision which will probably not be going? Other expenses, sir, it's about 850 crores for this quarter.

Other expenditure, actually, we have made some extra because of the statutory reading, our Redmond Fund 1. So there is a strategy provision that after you come and utilize that red dot pond, you have to give a complete cover of that which is green and everything, that we have made a provision of around 40 crores for that. Second additional provision we have made for our fly ash utilization, because the nearby area where we are used to dump our fly ash that has been exhausted and we have to transport further distance, so we have made a provision of transportation cost. So, that has I think we have kept 54 crore additional. These are the expenditure we have taken in the fourth quarter, that's why there is some additional impact.

Okay, so almost 90 crore. Not the cash expenditure, that is only provision. Sure, sir.

Also, sir, and what was the capex that we actually incurred in FY26?

FY? 26. Our target

was 1,700 but we have exited by almost 400 more.

Sure, sir. Lastly, you know, coming back to the alumina pricing scenario, so I think you earlier mentioned that Indonesia, the smelters were delayed, but the alumina refineries had come on stream, so there was a pressure on pricing. So, you know, by when do you expect this to probably normalize in the smelting capacity, you know, to start operation in Indonesia?

Indonesia smelting capacity is going to start this financial year end, some of the smelting capacities, but in spite of that, their refineries capacities are on the higher side. There will be an excess of aluminium in the market every time, this year or maybe next year, and with this, some of the smelters in the middle is going down, and their revival itself will take around seven to eight months or maybe one year. So this year, this financial year, there will be an excess of aluminium in the market, and the pressure on the pricing will be there.

Sure sir, but I think in the Middle East there was some alumina refinery capacity also. So is there any impact on that or that is operating on normal levels right now?

The refining capacity is less than their smelting. They were importing the alumina. So refinery as of now we don't have any... Yeah, update on the refining capacity, whether it has any effect on that. But of course, smelters, three smelters, Svantalam in Qatar, and EGA, Dubal, and one more smelter has got affected, and they reduced the production by around 50%. So that's why their overall alumina consumption has gone down.

Okay. So, yeah, thank you so much.

Thank you. The next question is from the line of N. Modi, an individual investor. Please go ahead.

Yes, sir. Thank you, sir. Sir, at what percentage of this coal and karchi soda we are able to produce, sir, captain?

What percentage of coal? Yes, sir. Of our personal requirements, sir, coal and karchi soda. Overall, coal requirement is around 7.2 million ton. Out of that, last year, we have produced our own, Utkal mines have produced around 4 million ton. This year, we are targeting 4.8 million ton. That is our in-house coal production. Out of 7.2, 4.8 this year we will be producing. And as far as caustic soda is concerned, around 50% of our total requirement is produced in our JV, that is in general.

Thank you. And balance, we are procuring from outside, sir.

Rest caustic soda, we are procuring from outside, and coal may be around 2.7, 2.5 to 2.7 million tons. We source from MCL through our linkage route, fuel supply agreement route.

Thanks, sir. One more thing, sir. This price of caustic soda has gone up, no? During last 2-3 months.

Yes, sir. Yes, sir. The cost of caustic soda has gone up. It has gone up by how much?

Caustic soda, if you think, last year average, it was, beginning of the year, it was around 38,000, and 25, 26 average cost is around 42,000, and first quarter, we are expecting 45,000, from

42,000 to 45,000, it has gone in last six months.

Yes, sir. Right.

Okay, thank you.

Thank you.

Thank you. The next question is from the line of Vikar Singh from ICSA Securities. Please go ahead.

Hi, sir. Good evening, and thank you for the opportunity. Sir, my first question pertains to your previous remarks, that you said coal would be 4.8 million tons from the capital source next year. So, has it received the EC clearance? Because as far as we are concerned, I think we had 4 million tons of EC.

That is almost under process, and we are very much sure that next coming 3-4 months, we will get it.

Sir, the second question pertains to after the Rayadar lithium projects which we were able to, which we are about to take off. So, anything happened in Carbale or any other segmental, any positive there, if you could give us some idea?

We are not getting you. You are not clearly audible, just if you can repeat your question.

I'll repeat from myself, sir. So regarding, there was a lot of news of us about exploring the rare earth and critical mineral access as well. Apart from the Kabul, Argentina mine, have we scouted or zeroed down on anything else?

Apart from Kabul, we have taken two, three projects. Gallium recovery is one hour.

In rare earth and critical mineral, we have a huge amount of red mud lying with us and there are some projects we have taken it up and in coming times there are some. Thank you. Some visibility that we will be getting some valuable items from this, but presently at presently these all are at ah pilot scale level and it will take another 2-3 years to calmly decide upon the ah value which we will get out of this, but. In some of the projects like gallium extraction project, we are at the advanced stage of putting up a pilot plant, and we will get the first right of extracting and putting up a gallium plant down the line after 2-3 years.

When we will be starting standing capex on the half a million ton aluminum smelter, When we can expect that project to take off when the capex will start going in?

That that will happen to be capex will start into 27, but that will be starting of the capex, but the main capex cycle will start in 28, 29 and 29, 30 will be the peak capex cycle and We will be completing it by 30 or 31. First half. So, we will be starting in 27 and 3 years we will be completing our 0.5 million and smile.

Okay. So, what could be FI 27 and 28 characters we have if we need to put in in our estimates?

For 0.5 million it will be around 18,000 crores?

No, 2728 is asking, 2728 will be around 4,000, around 4,000 to 5,000, 5,000 crores will be 2728. After that the capex will further increase, next 3 years it will go to around 8,000 to 10,000.

Because smelter will come with a power plant also, 270 into 4 megawatt power plant also is there. So, KPEX will be considering both of the projects.

Okay, so, majorly 4000 crore, majorly for the smelting plant in FF27. Is that a correct question? Yes. That's all for me. I'm all the best for you.

Thank you. The next question is from the line of Sumangal Nivetya from Kotex Securities. Please go ahead.

Yeah, thank you. For a chance, I got disconnected, so please excuse if it's already discussed. My first question is on coal. Can you just remind us what was the captive coal production for Fi26? And for 27, what is the expectation? And then the remaining coal, which is roughly around 300 million tons, which we are buying from Coal India. If you could just share what is the mix between linkage and e-auction.

As far as our coal production, FY26, we have done coal million tons, and this year we are targeting 4.8 million tons, rest of the coal we are taking through FSA linkage route from Coal India, e-auction, very less quantity we are taking, I think, out of the total quantity around 10%, 15% only we are taking from e-auction route, out of the remaining around 2.5, 2.6 million tons, rest we are taking through linkage route.

Okay, and roughly what would be the cost difference between linkage, e-auction and captive call?

Between our captive and this linkage call, the difference is around 300 rupees, 300 rupees per term. And in captive to linkage, if you see it, like captive to e-auction, it will be around maybe 600 to 700. 600 to 700.

However, nice, sir. In 25-26 our linkage coal cost is around 1800 and our captive wood coal is 1500. 300 difference, captive and linkage. Eoxone coal is slightly higher. Around 2100, yes.

So it will be around 600 difference with Eoxone. But Eoxone very less quantity we are taking. And on only 10 to 15% of the total retirement, especially for Ramanjuri, we are taking E to E of it.

Understood. That's very clear. So second, on the employee cost, can you guide us for next one or two years? What is our expectation? What is the employee count currently? And what is the retirement expectation over the next few years?

Yearly retirement is around 250 numbers will be retiring next 4-5 years. Our recruitment this year will be doing around maybe 200-250 recruitment this year. Next year we will see as per our requirement we will do. The employee cost will go down because the retiring people are in a very high scale of basic and DA they are in. So that will further go down because you see this year our overall employee cost. It was around 1721 crores overall expenditure on employee, and last year it was 786, 65 crores we have saved on employee cost, and it is coming overall 10% of the overall expenditure.

So, it will slightly reduce, slightly reduce.

What is the count today, around 4600? Strength, strength is around 49, 48, 48, 48. Sorry, 48?

Yes, you know, 4880.

Okay, because we were expecting the similar around 3400 deduction recruitment of 200 odd, but year on year there is no change. Last year also, whatever number I have is around 4800.

Yes, yes. Similar kind of thing, the people retiring and similar kind of people we are recruiting. Same number. But our fifth stream which is coming, since we are going for expansion, the fifth stream which is coming, for that we will be requiring an additional manpower of around maybe 200 to 250 for which our recruitment process has started. So in that area, since our volumes will also be increasing, so some additional manpower will be required there.

Okay, and the pay commission impact, when do we start seeing that, what is the estimate?

Pay commission impact will start from January 27th.

There will be some impact because of the last quarter of this fiscal and from next financial onwards, average increase will be 10 to 15 percent, but if you see the overall cost, because our volume will increase, so if you see the per ton of cost, it will be coming down. Though the absolute figure may go up, but per ton cost will be coming down because of our volume.

Okay, so roughly around 2,000-odd crores is what we can expect from FI 28.

FI 27, 28, now it is 1,700, it may, yes, 100 crores may be an additional question.

15 questions?

Yeah, 15 questions. Got it, got it. All right, thank you, and all the best. Thank you.

Thank you. The next question is from the line of Darshan Mehta from Zolid Capital. Please go ahead. Mr. Darshan Mehta, please go ahead with your question. Your line is unmuted.

Mr. Mehta, can you please proceed ahead with the questions?

As there is no response, we'll move to the next question, which is from the line of Nareesh Naikar from Systematics. Please go ahead.

Yeah, very good evening, sir. Thank you for giving the opportunity. Sir, I have no questions on chemical segment. If you see the revenue was pre-fall, it is 12% decline from 7,600 crore to 6,694 crore. So, I want to know what are the main primary factors this happened? And then the situation will normalize.

And going further, how do you see the volume and realization on this experiment?

You are talking about reduction in the revenue from chemical sector, right?

Yeah, revenue and margin, both. Yes, sir.

Chemical sector, you see, our prices have gone down by around $219 compared to last financial year, which has resulted into less revenue of around $2,659. That is the amount of loss we have suffered due to reduction in the spot prices. But we have compensated it by increasing the volume. We have sold around 3.4 lakh tons of excess of alumina by increasing our volume production, which I have told earlier also that we are targeting to increase the volumes. We have increased the volume of around production by around 2.5 lakh to 3 lakh tons. So, it has given us an additional favorable impact of around 1714 crores. So, net adverse impact of alumina. is around 784 crores only, in spite of 2660 crores of adverse impact due to pricing.

Okay.

Thank you. The next question is from the line of Akshay Jumeirah from Near Reserve Securities. Please go ahead.

Thank you for the opportunity and congratulations on a very good set of numbers, sir. Sir, what would be your... You on the alumina prices going forward, looking at the amount of surplus that is available due to shutdown of some of the smelter in Middle East, etc. Do you think that it's now at the bottom or do you see still scope of the prices going down as number one and also similar outlook on the prices of aluminium?

As far as alumina prices are concerned, it is almost on the bottom. Whatever spot tenders we are doing, we are getting the price of around $310 to $320. In few tenders, we are getting $330 or $336 also. But what we are expecting this fiscal, this financial year, it will be somewhere around in between $300 to $310. Average alumina pricing will be there. Metal pricing, of course, at present, it is at the peak around maybe 3,600 LME is there. We are expecting that it should be somewhere around average, if we see the average of the total year. Somewhere around 3,000, it will come down. Once the wars are over and all that, the situation normalizes. But somewhere around 3,000, because already the demand supply gap will be there, we expect that it will be LME somewhere around 3,000 average we will be getting.

And as you have mentioned that our prices are linked to LME and we do not do more frequent revision in our prices. So can we assume that it is basically some sort of a long-term arrangement?

It's not a long-term arrangement because LME keeps on changing and every three days we keep on changing our price as per the variation of the LME is there. And the premium, we do the export tenders. Every six months we do the export tenders. In between also sometimes we do. And depending on the whatever the premium we are getting on the export tender, we fix up the premium.

So how much, how much would be spot and how much would we pick long-term content in alumina and alumina both?

So telling alumina, most of our alumina is going on spot tender. Because every month four shipments we are doing on spot, we have done some few of the tenders on the long term that is three month and six month tender also. Now at present we don't have long term because since the pricing is very low, we are not going for the long term now. We are only relying on the spot tenders. Once the prices slightly stabilizes, these work situations are over, we will try from some long term contract also.

And are we on track with our expansion plan for alumina and alumina?

Alumina fifth stream expansion, our target was that June we will start the commissioning, June we will be starting the commissioning. Commissioning process takes three to four months because it is a chemical plant, process plant to stabilize the production and reach to the 50-60% of the rated capacity. So as far as as of now, we are on track, maybe one or two months delays we are expecting, depending on what happens when we start the commissioning process.

That was helpful, sir. Lastly, we have also mentioned in our results that the board has decided to discontinue the Utkarsh JV with Mishra Dhatu Nikam.

So, are there any plans for going in value-added products?

Because earlier it was emphasized that we will be going into value-added products in defense and aerospace and like that. So, what would be the plans going ahead? And how much would be the right?

Actually, Utkars JB was made and that basically, at that time, the forecast was that the growth in the transportation sector will be there. Of course, different sector requirement was there, but different sector requirement was very less. And the kind of capex involvement was there around 4,500 to 5,000 crores capex was required for that. And as of now, the requirement in the transportation sector has not grown like that. That's why it is not looking that much favorable. Even the IRR with the capex investment was coming negative. That's why we are not going ahead with that. As of our existing plant is concerned, we are going for one more wire rod mill to increase our wire rod production. Wire rod also be considered as a value added and the new wire rod mill will be producing more of a alloy grade wire rod and good quality wire rods. Around 60,000 tons of wire rod mill we are going in. It will take around two years. Our flat product, roll product plants, we are adding a month annealing furnace that will increase the production from our roll plant. Roll plant on an average we are doing around 2000 per month. We are targeting from this year onwards around 24, 2500 tons per month. That will again be a value added. These are the two areas where we are working to increase our value added presence in the existing operation. Of course, in our expansions, we will be targeting more of a value added that is wire rods, maybe Maybe some roll products or maybe billets, something like that.

That was really helpful, sir. Thank you so much, and wish you all the best.

Thank you.

Fine. The next question is from the line of Jayathakar from Panakal. Please go ahead.

Hi, sir. I'd like to know, in the beginning, you mentioned that your additional capacity in alumina would be 2,00,000 tons. That was your optimistic approach, right? What would be your conservative approach?

I think I don't know. It's very difficult to tell. It depends on the commissioning process. Optimistic and conservative, 2 lakh is the minimum we are targeting. It can go to maybe 3 or 3.5 lakh also, depending on the commissioning process.

Oh, okay. Okay. Got it. My other questions related to pricing were answered. Thank you very much and all the rest. Thank you.

Yes, sir. The next question is from the line of Rajesh Majumdar from 361 Capital. Please go ahead.

Yeah, good evening, sir, and thanks for the opportunity. I actually missed out on the employee cost increase in FY28 on account of the pay commission. What is the percentage increase you said in FY28 will happen on the employee cost?

Around 10 to 15 percent increase in the employee cost will be there. That will be the impact of pay revision in between 10 to 15 percent, which can be around 12 to 13 percent also.

Okay, nice. And my second question was on alumina exports. What is the figure for the exports for the year? Because we have given the total alumina hydrate sale of 14.46. But what is the export figure and what is the domestic sale?

If you see the export sales we have done,

alumina export sales. We have 1.38 is domestic. 1.38 is domestic and export sales we have done around 13.09 lakh tons and around 1.37 lakh tons of domestic service. So total.

1.37 lakh tons. Is this the calcined alumina or special grade?

It is combined. Calcined and hydrate both.

Okay, and special grade alumina, what would be the production?

Special grade is very less. We are producing around 15 to 20,000 annually. That much amount only is there. That is also included in this.

Okay, and in the new CAPEX, there is no increase in the special grade production. It's all calcium alumina, right?

No, no. Only calcium and anhydrate will be there.

Only anhydrate, yeah. Okay. Fine. And so my last question was on the aluminum smelter and power plant. Initially, we had talked about putting the power plant in a kind of joint venture structure with NTPC or somebody like that. But now, are we doing it on our own entirely? Is it going to be the full capex to be borne by Nelco or there's no joint venture?

Already, we are into agreement with Neville Lignite. We have signed one MOU with them. We are in the advanced stage of negotiation with them, with Neveli Lignite Corporation for forming a JV company in which 50-50 partnership will be there, because Neveli Lignite has got a coal mine here in Taltshire, and that will be very near to our CPP. So we will be having a coal security also for our expansion. So now we are in the advanced stage of forming a JV company.

So, the entire CapEx is not going to be borne by Nelco.

Yeah, yeah, the CapEx will get shared by both the JV companies.

Right, sir. Just one last question that if I could squeeze in. On the bauxite royalty, if I look at the other expenses sheet, the figure on royalty has varied a lot. In the COVID years, it was like below 200 rupees per ton. And then like now, after COVID, it was 600 and now it is somewhere around 300. What is the figure of the royalty and what is the royalty charge on the new bauxite mine? And will there be any revision in the Royalty or the old box headman?

Royalty figure will change, since the LME is high, Royalty will higher the box headman, because it is calculated back calculation. So it is not fixed, what is the percentage? Percentage of Royalty with LME, yes. A percentage is 0.56 percentage, I think, it is calculated content of aluminum in the box height, in that part it is calculated. It is coming around royalty part 450cc.

Presently it is coming around 400, but if LMA increases, it will go further.

Got it, sir, got it. And on the new mines also it is the same.

The quality is almost 42% alumina, and it is directly linked to LME, that's the end of the election process,

and the new mines also, the royalty will be the same.

Okay, thank you very much.

Thank you.

The next question is from the line of Rakesh Roy from Omkara Capital. Please go ahead.

Hi, sir. So my first question regarding export market, maybe I missed, sir. Can you say that you are 40-50% of the export from the Middle East, sir?

50 to 50% of export, you are talking about chemical?

Yes, sir. Yes, sir. Yes, sir. Alumina.

Alumina, our, like, total sales last year was around 3.4 lakhs. We have increased. Total sales export we have done around 13 lakhs, and domestic we have done around 1 lakh 37,000. So, export sales is, domestic sales is almost around 10% of the export.

And how much is from Middle East?

Middle East, what I was telling earlier also, around 40% to earlier, 45% to 50% used to go to Middle East, maybe sometimes more also, but now it has gone down.

And what is the outlook for FF21, especially for Middle East export, this will come down further?

It will depend on the war, when the war ends. It's very difficult to predict if the war ends and because now the route is also closed. Whatever route is there, whatever alumina was going, it is going to the state of homest. So that's why you have to take it to some route. So it's very difficult to predict now.

Right, sir. My last question, as you say, is Almena

prices will come down again for $300 to $310.

Any impact on margin front? So this will come down?

Any impact on margins, you are telling? Margin means already, compared to last year, it has gone down. Last year, our average alumina price was, in 25-26, you see, it was $376, average which we have got. In 24-25, it was $570. Now, this year, we are targeting around, we are seeing, expecting that around $300 to $310. So, that will be all.

Sir, and how much is going on any, as far as your calculations?

I think it will not affect the margin as a whole, because if you are not getting price in the alumina, but it is being compensated through metal price, because the alumina, the alumina, I take it. He is talking about alumina. Yeah, alumina is down, you see, it will come whole in. But Nalko, overall, I think there will be no impact on the price front. Thank you.

Thank you, sir. Why I am asking, because as you said, the Aluminium price will come down, so your Aluminium price will come down compared to last year, then the overall margin will come down.

Overall margin will not go down. You see our overall revenues, around 70% of our revenues is coming from metal, that is aluminium, and 30% of our revenue. This year it went down to around 27%. 73% from aluminium and 27% from alumina. So we are getting better margins on aluminium. So it will not reduce, in fact, it will increase our margin.

Thank you. That's it. Thank you, sir.

Thank you. The next question is from the line of Ashish Kejriwal from Nuwama Wealth Management. Please go ahead.

Thank you for the opportunity. Sir, quickly, a few questions from the raw material side. Are we seeing how much price increase in coal which we are buying from e-auctions? What kind of price increase we have seen in last two months actually?

The e-auction actually very, very less quantity coal we are buying. Only, suppose if we are buying around, we are taking coal from FSA route through Coal India, NCL, that is around 2.5 million ton. Out of that around 10 to 15% only buying in the e-auction route. And that is approximately 200 to 300 more than the fuel supply agreement which we have on the FSA route, linkage route. So, 300 rupees more we are getting.

So, sir, actually in last two months, have we seen any increase in e-auction coal price in last two months? Two months?

Think we have not done any, we have done, last two months we have not done any.

In the E-Aksham poll, if you compare with the last year average price and current year, there is a reduction, because it is a notified price for some premium. So last year it was average, first to us is 2700 and this year, 25-26, it is 2400 total, totally. So, there is a trend of reduction of price, if you compare with the previous year. So, we are... Yeah, understood, sir.

I was just looking at the last two months, because, you know, we have seen increase in reduction. ...telling about...

Due to war situation, you are telling any increase in the... Yes, yes. No, it has not increased, in fact, it has not increased, because there is an excess of coal available also. The coal production capacity has increased. So, evacuation is the main issue. So, e-auction call prices have not increased.

Thank you. The next question is from the line of Karthikeya Kumar Pandey from 361 Capital. Please go ahead.

Hello, I'm an Audible.

Yes, sir.

Yes, you are.

Yes, sir, most of my questions are answered. I just, sorry if I'm repeating the question, I guess.

So, can you just briefly mention the keypad number that you mentioned, I guess, to a participant in the book for 27 and then faculty for aluminium capacity?

This year, that is 26-27, we are targeting a capex of around 2,000 crores. Next year onwards, that is 27-28, what I told earlier also, somewhere in between 4,000 to 5,000 crores. And after that, subsequently here, it will further go up. That will be the peak time of smelter erection and all that. That will go to maybe 7,000 to 8,000 crores.

The gain, the reality is 30,000 crores that you are saying.

It is not 30, actually it is melter is 17 to 18 and our power plant is around 12. Since power plant we are going for JV, so only 50%, maybe 5-6000 will be requiring for that. So it will come down to around 23-24.

Thank you.

Thank you. The next question is from the line of Vedan Sarada from Nelbalbang Securities. Please go ahead.

Thank you for the opportunity. Can you please give the aluminium realisation for Q4FY26 and the current realisations?

Relation of, you are talking about aluminium or metal?

Aluminium, metal.

Metal. Aluminium average realization which currently which we are getting is around 3600 LMEs hovering, but now just because of war situation and all that, it has increased. But what we are expecting should be somewhere around 3000 or 3100 for the average throughout the year.

And Q4 realization? S526 Q4?

Q4 it was around 2000. Two thousand seven hundred sixty seven dollar. Q for average twenty five, twenty six.

Two seven sixty five. Hello?

2676. 2767. 2767.

So, you are expecting aluminium prices to come below 3,000 going forward in the financial year 2027. So, the average would be 3,000. Like it is currently overing around 3,500, 3,600.

Of course, this 35-36 is a very escalated thing due to war situation, because already some of the smelters are closed down, the capacities are reduced. When this smelter comes to the capacity, everything is normalized. So that demand supply gap will further reduce, and at that time the LME may go down.

Before this smelter disruption, before this war, aluminum was hovering around 3200 to 3300, so that is why I was asked.

Yes, that is optimistic which we are thinking it can go down to maybe 3000 also, but somewhere around 3300 to 3100.

Thank you, sir. Thank you so much.

The next question is from the line of Arjun from Chasing Lakshmi Investment. Please go ahead.

Hi, sir. Good evening, everyone. So, we're actually in some of the robust water and annual performance. My question is from C-PAR. The first is...

I'm sorry to interrupt you, Mr. Arjun. We are unable to hear you clearly. There is a lot of disturbance from your line.

Ms. Elgin, can you please check? Hello. Mr. Sergeant, can you hear us?

As there is no response, we'll move to the next question, which is from the line of Darshan Mehta from Dalit Capital. Please go ahead.

Mr. Mebuck, please go ahead with your question. Your line isn't muted.

Mr. Mehta, may we request it to please unmute yourself and proceed ahead with your question. As there is no response, we'll move to the next question, which is from the line of Sakit Kapoor from Kapoor and Company. Sakit Kapoor, please go ahead with your question.

Yeah, yeah. Namaskar, sir. Hope I'm audible.

Yes, sir.

Firstly, if you could please explain the key reason in terms of our profitability taking a dip for the alumina segment year on year, and if you could give us some color on what are the current price trends with respect to alumina.

You see, as far as alumina is concerned, profitability, I told earlier also, this year in alumina segment, our volumes has increased. Our volume has increased by around 3.4 lakh tons. Extra sales we have done compared to 24-25. 24-25, our production was 20.75 lakh tons. This year we have done around 23 lakh tons. So this has given an advantage of around 1714 crores. Of course, the prices have gone down. The prices have gone down from 595 average in 2425 to 376 average in 2526, which has resulted into negative impact of around 2659 crores. Overall, if we see the adverse impact is an alumina segment as compared to 2425 is around 784 crores. So that is there because of reduction in the prices. But we have also improved in the efficiencies like caustic soda consumption and all that. That has given some advantage of around 100 to 150 crores. So coming to this year, if you see this financial year, our volumes will be from existing refinery will be almost similar kind of volume because we have reached to the peak of around 23 lakh tons. 5th trim, which is the additional refinery is coming, 2 lakhs further will be added. So, similar kind of figures because prices will further go down. The prices of alumina, which is average was 376 last year, that is 25-26, will go down to around maybe 310 or 320. So, that will be having another financial impact of maybe around 1000 or 1200 crores.

Okay, and sir, when, how are we functioning in this $310 mark? Have we contracted for the entire year in terms of that, or are the current spot prices are hovering in those levels? What have we, how have we contracted in that? Yes, sir.

Current spot prices are at the level of $320, $320, sometimes we are getting $330 also. But the kind of situation which is there, there is an excess of alumina in the market, there is an excess of alumina from Indonesia, the requirement has gone down. That's why we are expecting ki the prices may not go up. We'll be hovering somewhere around 310 to 320.

Okay. Sir, earlier there was a formula on the basis of the LME prices, say 12 to 13 percent, correct me there, of what the LME prices for aluminum. That was the price trend for alumina. So, has that trend taken some head back because of the availability of alumina or what should we factor in?

That's because of ability only. Because earlier we have got in long term around 15-16%, 17% also of the LME. But now when we are going for long term agreement, last in or last long term agreement, we got around 11.5%, 11 to 11.5% only. And the main reason is the excess of alumina in the market.

Okay. And so then for the metal part of aluminum, what are we penciling in in terms of the current year? Means the profitability shift has taken, there is a significant profitability shift when we look at the segment results. Towards the higher aluminum prices, so what should investors pensando in terms of the profitability from the aluminum segment with the type of price strength that we currently have, and also the incremental volume of the metal that we can produce and sell for the coming year?

As far as the volumes are concerned, volumes metal also we have reached to the peak because our capacity is 4.6 lakhs. Last year we have done around 4.71 lakh tons of cast metal. And this year we are targeting slightly more, that is maybe 2-3000 more. But we have already picked out. Volumes will be almost similar kind of volumes. LME as of now is on the higher side, that is 3,600 or maybe 3,550 it is there. But once the situation normalized, the smelters again start producing, the LME will come down surely, because now the supply is also not there from the Middle East to the other parts of European where from Middle East was going. That is why also they have reduced the production. So LME will reduce to around maybe, it is very difficult to predict, but what we are thinking is somewhere around 3000 to 3100.

Okay. And for the first quarter, the quarter which is now in the month of April, what has been our average sales realization for the aluminum metal and how much have we contracted for the remaining part of the quarter?

This quarter, first quarter, like this month, our average realization is somewhere around 3,600, 3,550, 3,600 we are getting this month, that is April. And May also, we are expecting the first quarter will be good. First quarter, we will be averaging around maybe 3,500.

Okay, so there will be a significant contribution from on the higher realization from the aluminum segment, whereas for the alumina part, we will be in the same vicinity of 310 to 315 dollars.

Right, right.

And that was, that was, yes, sir.

If the metal price, if you see our metal, average metal price for the last year, 25-26, our profitability based on the average metal price is 2674, the whole year average. If our aluminum price varies from $3000 to $3100 for this fiscal, 26-27, so we'll be getting... Four hundred dollar more. So that is a comfort zone we are expecting, though there is some reduction in the alumina prices, but we will be getting that comfort in the metal price. If the whole year metal average price bears in the range of three thousand to three thousand one hundred.

Okay, sir. And, sir, so just to model it out, the quarter four numbers, give us a base in terms of what we can expect taking into account the current evolving situation. So we should be setting the space of, say, 2,300. A PBT number, that should not be trending lower if the cost component does not go higher. This understanding is correct on a…

That is correct. That is correct. If you produce that much of volume, then we are expecting that profit of more than 2000 plus, first quarter, because price is in our support.

And on the volume front also, sir, we have said that we have already reached the peak in terms of both the alumina and the aluminiums of whatever production or dispatches we can do. So going ahead, we are not getting, we are not going to see any incremental volume for the coming financial year, advantage of any incremental volume.

Financial year, whatever incremental will be coming from, I think there is an additional fifth stream refinery. So from the existing refinery, almost similar kind of volumes will be there.

And the new stream will be, sir, will be commensurating in which quarter?

We are starting, the commissioning process will be starting in June, and the commissioning process itself takes around 3 to 4 months. So maybe in the last quarter only we will be able to have the production from there. That's why we have targeted only 2 lakh terms from the new refinery.

Okay. And for the next year as a whole, sir, what would be, it will be rammed up to? How much?

Next year, the capacity is 1 million tons, that is 10 lakh tons. So next year onwards, it will be doing 1 million tons.

Okay, and in terms of selling of the product, it will be totally catered to domestically or what percentage will go towards as an export? How have we arranged the selling?

Like this year, this year out of total sales, whatever sales we have targeted, this year around 2 lakh, 2 lakh, I think 2 lakh 50,000 we have targeted for domestic. That we have targeted for domestic, and export will be around... I think 13 or 14 less will be a score. So domestic will be around somewhere around 10 to 15 percent of the score.

Okay, majority will be towards the towards the export only as has been the case for the current one.

Okay.

And lastly, towards this, the caustic soda part, and how is our Jinal, the JV, which we have with Gujarat Alkali, how have they been in the performance from the same, and what should we anticipate going ahead from the same?

You see, Jinal, JV, in the last financial year, that is 25, 24, 25, it has given a negative impact of around how much? Their total loss is 38 crores.

They have incurred a loss of 135 crores, but they have brought down to 38 crores this year. And most importantly, the last quarter, they have made a profit of 11 crores. That is the very...

We expect that this year again they will turn to profit, and the negative impact which they are having which will further reduce. Now we will be getting some money from them.

Okay, and sir, how have the price trend been for the cost rate? The cost which we have incurred through this JV, although it is at arm's length, how have the caustic soda prices trended?

For JV you see whatever prices we do, the rest of the quantity, 50% of the quantity we take from the market. Whatever pricing cost we are getting from the market, that is applicable to JV. They have to give us at the same price. There is no price consensus.

Yes, sir. There is no price. That was I am asking how has the price trend been for the Koshy Chota for the quarter ending March 26?

Price trend is like last year 25-26, it was 42,177 rupees per turn average. The quarter one 26-27, what we are seeing is it will be around 45,000. There is an increase of around 3,000.

Okay, from last year averages, it will be higher by 3,000 for the first quarter, June quarter.

Quarter one, quarter two, because we have ordered for six months. The first six months will be around 3,000 more.

Okay, sir. And lastly, sir, on the CWIP, the closing balance was 6,300 crore. So, what portion will get capitalized for this year and what are the facilities, sir, I think, sir?

I think 100% will be capitalized this year because the majority is towards the 50 expansion. It is around 5,500. So, if we capitalize from June onwards. So, I think this year the whole WIQ will be converted to assets, capitalization, yes.

And all the backward integration part for the coal availability on the coal mining part, sir, how much, what is the current update on the same, how much of the coal are we mining ourselves and through the MBO route? I think we have that question out here.

You see the call requirement is around 7.2 million ton. Out of that, our own production will be around 4.8 million ton. And rest will be taking mostly from our linkage route from Coal India. And around 5 to 10 percent will go for E-option.

Sorry to interrupt. May the request Mr. Sarkin's proposal please rejoin the queue. Thank you very much. The next question is from the line of Ashish Keshriwal from Nuwama Wealth Management. Please go ahead.

Thanks for the opportunity, sir. Sorry, I got disconnected that time. So, sir, I think you mentioned that E-option coal prices, we have not seen any major increase in last two months. That's right? Yes, sir. Okay. So, secondly, the way you mentioned about costly soda price, is it possible to share your different raw material prices like CP Coke, CTPitch, and Aluminium Fluoride, what it was in F526, and then what it was?

You see, costly soda prices, average, 2526 was 42,000, it has gone to 45,000. CP Coke, 2526, it was 53,000. This year, Q1 and Q2, it will be somewhere around 57,000. Aluminium fluoride 1,21,000. It has gone to 1,30,000. HFO has further increased. HFO and LDO, that is the substantial increase which we are seeing. LDO from 46,000 to 70,000. So this kind of increase we are seeing in caustic soda, CP coke, aluminum fluoride, and HFO.

Sir, what about CT pitch?

City pitch is almost same. City pitch 8 minutes. City pitch, no, it has gone up from 44,000 to 56,000. The city peach has gone up from 53,000 to 57,000. Oh, sorry. CP coke has city peach from 53,000 to 57,000. Around 4,500 increase in city peach. And CP coke from 44,000 to 56,000. This may be around maybe 11,000, 12,000 increase.

Sir, if I am looking at from F526 average versus first quarter, we are seeing increase in all our raw material prices. I think that has only been somewhat offset by, you know, I don't know from where it is being offset. Your cost of production definitely should increase from what we are talking about, 150, 155. Isn't it so?

Yes, yes, cost of production will increase. So, when we are talking about 155 to 160, that was for Q4 or F526?

Average cost is around 155, 156 for the whole year. If you see the Q4, it is around 157, 158. So, we are keeping the highest rate of 160. In any case, it will not go beyond 160.

Understood, understood. And then lastly, what could be our power cost per unit?

Power cost per unit is around 3.15.

This is at EBITDA level we are talking about.

EBITDA level it is coming around from, if you see the expenditure, it is coming around power cost is 31%.

On the total cost, yes, total cost, if it is the revenue, it is coming around 1.

Sir, actually, I was trying to ask, you know, what could be our power cost per ton of aluminium? So, when we are talking about 155 to 160,000 per ton of aluminium production, what could be our power cost in that?

It is coming around around 31 percent, right? 55 to 60,000.

Okay. Okay, sir. Thank you so much. That's helpful. Thank you.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Bharat Kumar Sahu for closing comments.

Thank you, man. On behalf of Nalko, I thank all participants who took out their valuable time and shared their views and took interest in Nalko's growth journey. We thank you, Tim Kouras, for facilitating this earning call for Q4 and FY26. And we are also thankful to Systematist Group for posting the earning call. We will look forward for similar kind of cooperation on a continued basis. Thank you. Thank you all.

Thank you. On behalf of NARCO... Yes, sir. Please go ahead.

Okay. Thank you. Thank you. Okay. You go ahead.

Thank you, sir. On behalf of NARCO Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.